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What They're Not Saying about Your Money

Aired September 21, 2008 - 20:00   ET


ROLAND MARTIN, CNN ANCHOR: This week we have got to confront and deal with what is happening with the middle class. Middle class this, middle class that. Everybody is talking about the middle class. What's happening with our middle class?

You watch Senator John McCain, Senator Barack Obama talking about the middle class, talking about jobs and housing and health care and education. But first and foremost, who in the heck is the middle class?


MARTIN: Six weeks, just six weeks to go before the election, folks, and the economy is finally blasting through the campaign north (ph). Just this week, we've seen Wall Street giants fall. Lehman Brothers collapses. Merrill Lynch, the nation's biggest brokerage sold on the cheap. And the biggest insurer, AIG, bailed out by the Feds, which, of course, means you and I are now footing the bill.

Jobs, more than 600,000 up in smoke since January? The price of homes falling across the country. Almost one in 10 mortgages delinquent or in foreclosure. The presidential candidates have enforced that to what polls say is your number one issue, you and your money. And for middle class voters, it's about time.

This hour, we'll find out what Senators Barack Obama and John McCain are really saying about the economic meltdown, and more importantly, what they are not saying.

So let's go to someone who cuts to the hype, CNN's senior business correspondent Ali Velshi. And, Ali, this has been a crazy week.


MARTIN: What is going on on Wall Street?

VELSHI: Well, at 16 weeks worth of news in one week this week, but what has really happened is that if there is anyone in America who was still thinking that the fundamentals of our economy are sound, you are not going to hear from them again, particularly not on the campaign trail.

We have finally decided that we are officially in a big mess right now, and the government has stepped in to try and get this solved once and for all after those failures that you've talked about. Now, this is a big deal because if you are middle class in this county, there are only three ways to retire rich. You marry rich, you win a lottery ticket, or you invest in the stock market. And the stock market took a bath this week.

MARTIN: OK. I have to ask you this, OK, because no one seems to be able to answer this question.


MARTIN: Who is the middle class? Everybody keeps saying middle class, middle class, middle class. Can you please help me define the middle class?

VELSHI: It's very interesting because here in the United States is different from other places. There are other countries, let's say, in some European countries, if you come from the working class even if you do well, you are proud to be part of the working class. In America, we are a big lump of people in the middle class and it is about the ability to do better than the people who came before you, better than your parents and you kids' ability to do better than you.

MARTIN: So what is it? You're educated? How much money do you make?


VELSHI: No. It doesn't matter how much money you make...


VELSHI: ... because middle class in urban California is different from where it is in the Midwest of America, the ability to live in a house, to educate your kids, to have a certain lifestyle that allows you some leisure, and the ability to do better every year than you did before.

MARTIN: Is this economy just simply spinning out of control? What is going on?

VELSHI: Look, there are various legs of the stool of the economy that make people think it's spinning out of control. And in America more than anywhere else, it is dependent on the ability and the willingness of you and me to spend money. Other countries don't depend as much on people spending money, but in America it does. So if we don't feel the economy is good, it doesn't have to be spinning out of control. We just don't have to be advancing and then you put your money back in your pocket and you wait.

MARTIN: Look, also we get laid off left and right. I mean, what's going on? Is this going to get worse? I mean, I'm not really happy about what's happening.

VELSHI: Let's say you thought that this was a nine-inning game and we're in the sixth or seventh inning, all right, of this economic downturn. The sad part is that job losses lag behind everything else. So you might see because of this new deal that the government is trying to put together, this rescue plan, you might see the stock market start to go up. You might see housing prices start to go up. But the bottom line is jobs will take a while.

There are economists who tell us -- I'm going to show this...

MARTIN: All right.

VELSHI: ... that you need 100,000 jobs every month just to keep up with the growth in the working age population. OK, 100,000 every month.

Take a look at where we've been since January. Down 76.


MARTIN: Negative, negative, negative, negative.

VELSHI: Down 83, 88, 67, 47, 100,000, 60, 84. You average that out, we are losing 76,000 jobs a month.

So let's just get this straight. You're supposed to be making a hundred new ones?

MARTIN: Right.

VELSHI: We're losing 76. OK. We have lost 605,000 jobs in 2008. That is a serious problem because you know what? It's not about your mortgage at that point, or about your energy prices, you don't have a job, you don't have those expenses. It gives you nothing to do.

MARTIN: McCain and Obama have been focused on the economy all week. What can they really do? Can they truly impact the economy as both say they can?

VELSHI: Look, they can't fix the housing market. They can't fix the job situation and they can't fix the stock market. And the bottom line is, in order to feel prosperous, three things have to happen. You either have to be increasing your salary, you either have to be increasing your 401(k) through the stock market, or your big assets like your house are increasing in value. None of those are going on.

Let me show you what the housing price situation is right now. We were seeing an increase in home prices way back in the 2000, 2004, 2005. 2006, we finally hit about 222,000, 221,900.

MARTIN: So we went up, up, up.

VELSHI: Up. Then 2000...

MARTIN: Slightly down.

VELSHI: Slightly down. And then more down. So we're about 200,000 bucks. So your (ph) value of your house has gone down.

MARTIN: Yes, but that's median average.

VELSHI: Median. That's tax.

MARTIN: It could be different, this tax is in North Carolina, California and New York.

VELSHI: Absolutely. But the bottom line is you are not feeling like your wealth is increasing on your salary, in your 401(k), or in your house. And the bottom line is your president has got to make you feel like they're on it.

MARTIN: Ali, I appreciate it, man. Stick around because we'll be talking more with you throughout the show.

The candidates have been having a war of words about the economy, folks, all week.


SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Our economy I think still, the fundamentals of our economy are strong. The fundamentals of our economy are strong.



SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: You, the American workers are the best in the world, but your economic security has been put at risk by the greed of Wall Street. That's unacceptable. My opponent's only solutions are talk and taxes. I'll reform Wall Street and fix Washington.


MARTIN: What are John McCain and Barack Obama not saying about the economy? For answers, we go all the way to Anchorage, Alaska, the last frontier, where our political correspondent Jessica Yellin has been working the Sarah Palin story.

Jessica, how are you doing?

JESSICA YELLIN, CNN POLITICAL CORRESPONDENT: I'm doing OK, Roland. Glad to be with you.

MARTIN: All right. The candidates say they're going to solve this crisis, but what are they saying about how they're going to do it?

YELLIN: Well, John McCain is hitting a much more populous tone these days saying that he'd like to open some sort of new agency or trust that would oversee Wall Street's financial institutions, to sort of detect meltdowns before they happen, if you will.

Barack Obama is saying, look, we should find solutions for Main Street as well as Wall Street, and he's proposing a sort of emergency economic stimulus targeted at working families. But to be honest, Roland, both of these men are talking a whole lot about what the other guy is doing wrong and how the other guy is tied to the problem more than they're proposing detailed solutions that will help real folks.

MARTIN: Now, they keep saying they're going to help the middle class. So, what specifically is their plan to do so?

YELLIN: Well, let's talk about taxes first. Barack Obama has been hit a lot by John McCain for saying Obama is going to raise taxes. The truth is Obama would actually lower taxes for most Americans. Anywhere from 80 percent to 95 percent of Americans would see lower taxes under Barack Obama. He would raise taxes on the wealthiest Americans.

Now, John McCain, on the other hand, would do an across the board tax cut that hits just about everybody, but the wealthiest or the wealthier Americans would get the biggest cut of all. So you see a real difference in their approach just and who would get the biggest tax breaks.

On health care, Barack Obama, he said he would guarantee that everyone can get health care and create a mandate for kids. John McCain wants to do it in a much more private sector sort of way, giving incentives for people to buy their own health care instead of companies. So those are two areas where you see really big differences how they would approach those pocketbook issues that affect middle class votes.

MARTIN: All right. You know, you told us what they are saying on the campaign trail to all these town hall meetings. What are they not saying to the voters?

YELLIN: Look, Roland, I mean, listen to what Ali Velshi just said.

Incomes are down. The stock market is down. Consumer confidence is down. Unemployment is up. Debt is up.

What can one person, even the president of the United States do on their own about this? It's very limited. Anything they have to do even if they want to enact tax cuts would have to be factored into a huge budget deficit. We are at war.

Look, they're spending billions on these bailouts. There's only so many cuts they can really enact. And then when they want to, they have to get it through Congress and seeing that happen is like watching an ant move through molasses.

MARTIN: Now, look, we've seen what happened this week. Do you believe based upon what you're seeing and feeling and hearing on the campaign trail that the economy is going to determine who is the next president?

YELLIN: Yes. I mean, look, you heard it here. It's issue number one, and it really is. Voters, a lot of them are just starting to focus right now, and they're feeling the pinch. And so they're going to be looking closely at these economic issues. It is the overriding concern.

The one unknown is a lot of times whatever big event happens the one week before voting day, before Election Day, sometimes that drives those last minute undecided voters and we can't know what that is yet. But until then, it is the economy first and foremost.

MARTIN: All right. Jessica, thanks a bunch, and be sure to bring a souvenir back. OK?

YELLIN: You got it.

MARTIN: All right, folks. This whole financial mess started with the housing market completely blowing up. So forget the numbers and the politicians' promises. The economy is all about you and your money.

When we come back -- Lea, Mark, Barbara and Christopher -- regular people just like you and me, share their personal stories about how they are being hit hard by this economy.



LEA TINGLEY, FORECLOSURE VICTIM: We've sold a lot of things to make the mortgage payment.


TINGLEY: Gold coins that you know has been passed down in my family, heirlooms. We're stuck here. We can't do anything about it.


MARTIN: Folks, can you hear the pain in Lea's voice? She's with me and we hear her story in a moment. But Lea's not alone. Trust me, I understand.

Now, look, don't let this suit and my position for CNN fool you. I know exactly what the middle class is thinking and the fear they face every day.

I grew up in Houston, Texas, a solid, striving middle class family with two parents and four kids. My parents never went to college, never made more than $75,000 combined. We're always focused on making ends meet, especially when three of us were in the same college at the same time. The biggest challenge of all was keeping a roof over our heads. And for the middle class today, that challenge is harder than ever as my next guests know firsthand.

Lea and Mark Tingley got talked into a mortgage they couldn't afford and our now barely holding on to their North Carolina home. Barbara Harvey lost her home in California and spent several months early this year living in her car. That's right. In her car.

And Army Sergeant Christopher Joseph is a disabled Iraq War veteran. He is fighting foreclosure on his home in Long Island, New York.

I want start with you, Lea. You're 23 years old.


MARTIN: You guys have a $109,000 mortgage, but you're making $10 an hour. How did that happen? And how long was it before you guys started having problems making that note? L. TINGLEY: It was the first year Beazer arranged the mortgage and they did what we were told was a two-one buy down. Basically, the first year of our mortgage, Beazer Mortgage was going to make a portion of the mortgage payment. So our mortgage payment for that first year was affordable.


L. TINGLEY: It was --

MARTIN: First year, no problem.

M. TINGLEY: No problem.

L. TINGLEY: First year -- first year, it was OK.

MARTIN: Then what happened?

L. TINGLEY: Then it went up the second year. And then it went up again the third year, and it's just been steadily climbing.

M. TINGLEY: It's steadily climbing every year.

L. TINGLEY: Every year.

MARTIN: So, mortgage going up, you can't keep up because your salary is not going up.

M. TINGLEY: Exactly.


MARTIN: Wow. Look, I understand because a lot of folks all across they country we're hearing those kinds of stories.

And, Barbara, you understand as well because your job was notarizing housing notices. So what happened with you, how you saw the market and then your house situation? What happened there?

BARBARA HARVEY, LOST HOME TO FORECLOSURE: What happened with me is I was a signing agent, signing mortgage documents and home equity lines of credit. And that stopped all of a sudden last November. So I --

MARTIN: So, you saw the housing crisis?

HARVEY: Oh, I saw it coming for several years.


MARTIN: You separated before everybody else did.

HARVEY: Several years. I actually talked to people in the office that I worked for. I was like on a contract basis. And I said, you know, there is something wrong with these documents. This income isn't correct for these people.

MARTIN: Then it began to affect you personally. You had to live in a car?

HARVEY: Yes, I did. I lived for about five months in my CRV.

MARTIN: In your car in a parking lot.

HARVEY: In a parking lot, safe parking lot with...

MARTIN: With two dogs.

HARVEY: With my two golden retrievers.

MARTIN: What was it like, I mean, having to live in a car for several months?

HARVEY: Well, it was cramped as far as sleeping was concerned, because the dogs slept in the car with me.

MARTIN: Was it safe?

HARVEY: It was safe. It was safe because it was a safe parking area.

MARTIN: And what you mean by that is where you live, that the city set aside parking lots for people who have the same problem?

HARVEY: Yes. Yes, they did.

MARTIN: Wow. First of all, the fact that a city actually had to create that kind of deal is stunning.

Now, Christopher, I want to go to you because your situation is a little different. You're coming back from the Iraq war, you're injured, you can't continue working. You're fighting right now just to stay in your home...


MARTIN: ... but the company wants to take the home. Tell us what happened.

JOSEPH: I fell behind with our mortgage because I got deployed and I got injured while I was in Iraq. Coming back and working as a mechanic, I couldn't continue that work anymore so I lost my job. So then, we just started falling behind in our bills and couldn't keep up. I was waiting for my --

MARTIN: Any kind of help for you from veterans groups?

JOSEPH: Yes. I have two veteran service agencies help us out, which helped us maintain paying our bills and keeping our mortgage current, and was able to maintain and stay current up until May. I waited for my disability to come in. That finally came in. I was able to catch up with June and July's payment.

MARTIN: Right.

JOSEPH: And the mortgage company said to put money back and they want to foreclose.

MARTIN: And, Mark, what I thought to be interesting because -- and your story happens to a lot of people. We get to focus on just those folks who are losing their homes, but in your neighborhood, almost a sudden you saw it happening all around you and the impact in terms of the value of your home.


MARTIN: How is that affecting you guys in terms of trying to make a note, but your value has now dropped?

L. TINGLEY: It means that we're going to be there for a very, very long time.

M. TINGLEY: We can't sell our house.

MARTIN: You can't sell your home?

L. TINGLEY: No, no.

JOSEPH: Realtors even in my block.


L. TINGLEY: Yes. Yes.

M. TINGLEY: Real estate agents won't even try.

L. TINGLEY: Real estate agents won't even -- won't even try, won't even attempt.

M. TINGLEY: They just toss it.


L. TINGLEY: Because they know that the houses --

JOSEPH: Because they're sitting there for over a year with a "for sale" sign, and nobody is touching it.


MARTIN: Crime is also a big issue as well.



MARTIN: Neighborhoods, I mean, they're just wide open.

L. TINGLEY: They simply go to the auction and they're sold.

M. TINGLEY: Recently, three times we've been broken into.

MARTIN: It was your home? L. TINGLEY: Yes.

M. TINGLEY: Yes, within the past two months.


HARVEY: In Santa Barbara County, that's happened too. They have areas in Santa Maria that even the police won't go in there...


HARVEY: ... because of the crime and the people, the squatters in the homes, and large tracts of homes, hundreds and hundreds of homes that are empty. And I don't understand why we cannot rent those homes back to those people who've lost that mortgage.

MARTIN: Unless you both are renting because you actually went to a high school reunion, ran into an old friend, that's how you were able to go from the car into a home. Tell us what happened with that nice friendly reunion.

HARVEY: Oh, it was wonderful. I spoke with a friend at the reunion. My friend, Tom, he has a house in San Luis Obispo and he was very upset that I was homeless. And he said, "I have some people who are renters who are leaving in July. Would you like to rent it? And it's affordable."


HARVEY: And bless his heart because he is taking a lot less rent from me.

MARTIN: That is indeed a blessing. Any moment where you guys said, I'm losing hope that this is over.

UNIDENTIFIED MALE: Yes, almost on a weekly basis.

L. TINGLEY: Yes. We have many times, my husband and I, we get to decide we would sit and we would just be like, you know, we're not getting anywhere. It's a sinking ship.

MARTIN: And some of your neighbors simply just left.

M. TINGLEY: They just left.

L. TINGLEY: And we've often with a crime that has started in our neighborhood. We have often just thought about just calling up a company and just moving and letting it go.

MARTIN: Christopher?

JOSEPH: (INAUDIBLE) in the house with the owner owing us money and the seller owing us money, and we are trying to track him down. So we're trying to get that back and hold on to the house.

MARTIN: Ali Velshi, this is an amazing, an amazing story. VELSHI: Yes.

MARTIN: And a lot of people are dealing with this all across America.

VELSHI: Yes. Let me tell you something. All through American history, wages have been increasing, right? You get a little bit more money every year, and the price of a home has been increasing.

So if you look at a chart of median wages overtime and median home prices overtime, up until about 14 or 15 years ago, they were moving the same way. So the degree of aspiration to get into a house as a family has been the same all along. And then suddenly, wages started to drop off and home prices started to increase. So the spread now for a middle class family to get into a home is huge.

But what I heard Lea saying is we're not getting anywhere. We're not getting forward.

MARTIN: Right.

VELSHI: That is the feeling that is trapping middle class America. This may be the first generation of people who are actually less well off than their predecessors.

MARTIN: Christopher, if Senator Barack Obama and Senator John McCain are watching this show, what do you want them to know about your story and this crisis?

JOSEPH: Well, this is my story, everyone's story. We need help. They're bailing out AIG and all these other companies, what about the homeowners. Try bailing us out for a change.

MARTIN: Mark, Lea?

L. TINGLEY: Yes. Same way.

M. TINGLEY: Yes. They're bailing them out, but we're paying either way. I mean, tax money is actually be paying us off.

L. TINGLEY: I don't see for these companies that are doing this to people.


L. TINGLEY: They know what they're doing.

M. TINGLEY: And they're getting away with it.

L. TINGLEY: And they're getting away with it.

MARTIN: Barbara, you never felt like a victim in all of this.


MARTIN: What will you tell these two individuals, one of them who will be president come January 20th? HARVEY: I'd say they better get some plan together that, in fact, will give people an opportunity to stay in their homes and rent them.

MARTIN: Barbara, Lea, Mark, Christopher, certainly thanks a bunch. Good luck. We'll be praying for you guys.


MARTIN: Well, next, how a medical emergency sent me, that's right, me, into bankruptcy. That and other stories for Americans just like you on our health care meltdown.


MARTIN: We're back with more from our panel of average Americans who had to stare down a health care crisis and, of course, their stories about health care in America. It seems like every other person has a medical horror story and I'm no exception.

Eight years ago while covering the Democratic Convention, my appendix ruptured sending me to a Los Angeles hospital for five days racking up more than $80,000 in bills. I was 29 years old and I didn't have health insurance.

The pressure to pay off that debt while working freelance put a lot of stress on me. I was unable to keep up with the house payments putting me on the brink of foreclosure and, yes, into bankruptcy. It was only by the grace of God that things worked, eventually worked out. And this month, thankfully, I made my last bankruptcy payment. Praise the Lord. So, yes, I know all about what my next guests are going through.

Lisa Cristia is a cancer survivor still paying off a nearly six-figure debt for treatment her insurer would not cover. Michelle and Ralph Iallonardi have three sons diagnosed with autism, and they have gone tens of thousand dollars in debt trying to take care of their sons. And Jim Matthews can't quit his job or retire because he will lose his health insurance.

Now, Lisa, look, you had tongue cancer? You don't smoke.


MARTIN: So, what happened there and how were you treated that put you in this difficult position with so much debt?

CRISTIA: Well, what happened to me was that I was 17 years old when I moved out on my own, and the only place that I can work to make money and to pay my bills was in the hospitality industry. So I worked in several bars, several restaurants pretty much most of my life. What I ended up doing is I ended up training in tits-for-tats (ph) ends when I was diagnosed with secondhand smoke.

MARTIN: So you were a waitress, correct? Then, you got secondhand smoke.

CRISTIA: Well, I got stage three tongue and throat cancer from the second hand smoke.

MARTIN: Wow. Wow.

CRISTIA: Which I thought it was covered. At that point, I was actually out of the hospitality business. I was working for a large company, had been there eight years, went through my treatment and eventually end up losing my job. And with all of that, I ended up -- the bills started piling up. I thought I had enough coverage, but it turned out that I was underinsured.

So the insurance companies paid part of it but not all of it. And I ended up going through my savings account, cashing out my retirement fund and still had to file bankruptcy on $65,000 in medical bills. And part of the tragedy is that I filed too soon and I'm now stuck with about $40,000 more.

MARTIN: Oh, so in terms of -- so you went in early then accrued more bills. And you've been unable to add those bills to that bankruptcy?

CRISTIA: Exactly.


CRISTIA: And now, I actually -- I keep them in a box right here because I don't know --

MARTIN: All those are the bills you've been getting?

CRISTIA: Yes, they pile up and I have no idea when or how I'm going to be able to pay them. I put them in the box and unfortunately, it's a constant reminder to me about how badly in debt I am. That not only did I go through to battle cancer, but now I've been battling financial ruins.

MARTIN: First of all, you're celebrating five years of being cancer free.


MARTIN: So, we're definitely thankful for that.

CRISTIA: Thank you so much.

MARTIN: Michelle and Ralph, both of you understand what insurance pays for. It doesn't pay for in terms of the treatment of your sons. How have you been able to grapple with going deeper into debt, taking out additional mortgages on your home? Please share with us your story.

MICHELLE IALLONARDI, MOTHER OF THREE AUTISTIC KIDS: Well, all three of our boys were diagnosed with autism basically within a year's time back in 2004 and 2005. Our oldest son has a lot of medical problems that many children with autism have. You know, it's common for children with autism to have gastrointestinal problems, sometimes brain inflammation or just different medical conditions. Luckily with the treatment, intensive treatment, educational and biomedical, two of our boys, our younger boys are almost completely recovered. They were declassified and they don't really need services anymore.

MARTIN: You think that was because of all the treatment?

M. IALLONARDI: Absolutely.

MARTIN: So for you, it was an investment that paid off.

M. IALLONARDI: Absolutely.


M. IALLONARDI: Any investment in my children, you know, pays off and is worth it. But our oldest son is medically complicated still and severely dependent and he has a lot of health problems that, you know, aren't always covered by insurance.

MARTIN: Now, Ralph, he is covered under Medicaid, but is that enough to take care of his needs?

RALPH IALLONARDI: It's not enough. It's not enough. And you really, sometimes you're faced with stark choices because when you find out your son is diagnosed with autism, you're going to always side to try anything you can whether it's approved by some board or some agency or not. If you find out through enough parents and through channels that that treatment may work, you're going to do anything you can to try it.

It's -- you're son doesn't have -- you don't get to make up anytime with a person with autism. You don't try something when he's three years old or four years old. You don't get to make-up that time, so you're going to try. So you're choice is going to be to try that treatment.

ROLAND MARTIN, RADIO TALK SHOW HOST: A lot of folks who are not in the industry have no idea of all the different rules and regulations. Jim look, you're in it. You understand it but you're also facing your own health care crisis.

JIM MATTHEWS: I see it from both ends and I developed atrial fibrillation in the 90s and was in atrial fibrillation for six years. That's an irregular heartbeat in the top chambers of the heart. It's kind of like running on six cylinders when you really should be running on eight.

So I opted for surgery which cured the problem and then a year later they found out I had an aneurism of the aorta which is just being watched, but it's for that reason my health insurance is so expensive.

I pay, my wife and myself, $19,000 a year for the base premium. If last year was an example with co-pays and co-insurance, medicine and deductibles, I paid an extra $5,000.

MARTIN: Your problem is because you had a preexisting condition, you quit or you retire --

MATTHEWS: I'm self-employed. Here's the issue, in all of America, if you are self-employed, you can't be denied a policy. I get audited every year by Blue Cross Blue Shield in North Carolina.

If they find out if I am not self-employed anymore, they will drop me; they'll give me 30 days. Then I have to look for a policy on my own, as an individual. In 45 states, you can be denied health insurance as an individual. You have very little protection as an individual. So I have to stay self-employed. If I go to the individual market, I'm in trouble.

MARTIN: Ali, what's amazing -- I want to bring in Ali Velshi, folks -- what's amazing about these stories is that some folks are covered for some procedures covered and not covered by others. They have pre- existing conditions and stuff.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: And guess what those who haven't had to suffer this have no idea. I assume, God forbid if I get sick, I'm going to a hospital, someone will take me in. They will diagnose, they will give me the medication I need. But America, by the way, one of the consequences of the last few years in the economy, we have a negative savings rate. That means we spend more than we save.

Which means that if you are suddenly stuck with a bill for health care that of the costs you $20,000 or surgery, the money is not there. Now what happens? You get into debt. People carry this on credit cards.

But now we are in a debt crisis and that's credit that is hard to come by and that credit is very expensive. If there is anything that is a middle class killer, it's this health care problem. Because you could be trekking fine until somebody gets sick in your family and that's that is the end of your middle class existence.

MARTIN: Ali, thanks so much.

Health care is a major topic in this presidential debate.

Do you guys think that the candidates are truly addressing the problems that the four of you had been enduring for years?

LISA CRISTA: Honestly I think that it's definitely is a hot point issue. I think they are really working on trying to get the word out that they are going to do something about it. I don't know if it's going to be one of those things that they talk about and then they'd let it go by the way side.

I am hoping and praying that that doesn't happen because something needs to be done. Somehow government needs to get involved because people are dying every single day because they don't have coverage or they don't have enough coverage.

MARTIN: Jim, real or shallow conversation being held?

MATTHEWS: Well, I mean it's very shallow. John McCain wants to go ahead and tax employee health benefits. That's going to truncate employers giving benefits to employees. It's going to raise -- I read one study that said it's going to raise up to 60 million to 45 million the number of people that are going to be uninsured. And he wants to make it market-based and give a tax credit, but does nothing for people like me with pre-existing.

MARTIN: What about Obama. He's saying universal health care, but not necessarily universal.

MATTHEWS: No, that's the one problem and I probably preferred Hillary's plan over Obama, but listen, it's a heck a lot better than what we're going to get with McCain.

He's going to allow someone like to buy into the Federal Plan or to Medicare which now can be part of a larger group and the risk would be spread. By doing so, it's a step in the right direction.

MARTIN: Michelle and Ralph, are you encouraged by what you are hearing on the campaign trail? Or are you saying it's not enough?

RALPH IALLONARDI: I agree with Jim. I think it's at least a step in the right direction. I mean, if you look at 15 years ago and 16 years ago, you were laughed out of the room if you mentioned national health care; where are we going to get the money and we can't do it, it will never work. Look at the countries that have it, it fails.

At least now both sides are starting to talk about it and whichever side you agree with at least they're starting to talking about it.

MARTIN: As we say this year, we need less talk and frankly more action.

Lisa, Michelle, Ralph, Jim, I truly appreciate it. Thanks a lot and we hope everything works out for all of you.

When we come back, another economic issue that is stressing a lot of Americans; jobs, jobs and more jobs.

Before that a house cleaning note: coming up after this show, "The Next President, a World of Challenges." Five former Secretaries of State have some advice for the next president. Christiane Amanpour and Frank Sesno get the answers.



MARTIN: These candidates keep talking about the middle class. I believe that there are four fundamental issues across the board that speak to the middle class and that is: jobs, housing, health care, education.


MARTIN: With just six weeks to go until November 4th, the economy is the number one issue of this election. Now look, we've already talked about the Wall Street melt down and the crisis in housing and health care, but for most Americans the bottom line is jobs.

The outlook, folks, is not pretty. 600,000 jobs lost this year; unemployment over 6 percent. Job growth at the weakest since the Great Depression; that's 80 years.

Both said they have the solution, but there are no easy fixes. What do you think? I'm taking some phone calls right now. My good buddy, Ali Velshi, he's standing down.

First up, battle ground state, Mike in Michigan. Mike, what say you?

MICHAEL, FROM CANTON, MICHIGAN: I want to thank you for inviting me to share my views.

MARTIN: All right.

MICHAEL: We have a very serious issue here in the United States; jobs, good jobs are the key to a good economy. Without the good jobs being created here in America, there is no future for the American people. I cannot stress it.

MARTIN: Michael, first of all, you hear the candidates John McCain and Senator Barack Obama both going into Michigan talking about creating jobs. Are you buying what they are saying?

MICHAEL: Our family has Confidence in senator Obama. We are Irish Catholic boys from the Boston area. Senator McCain, in our opinion, and I'm a former marine corps and naval aviator myself, Senator McCain is not connected to the reality that the fundamentals of this economy are sound. That is our final assessment of Mr. McCain.

MARTIN: All right, Michael, I certainly appreciate it. Thanks a lot.

Let's go to another battle ground state, Ali; Natalie in Ohio. Hi, Natalie.

NATALIE FROM CINCINNATI, OHIO: A big issue about the jobs is that jobs that used to earn a middle class living wage seem to have disappeared and I'd like to blame outsourcing and sending the jobs overseas which we hear everyday. Which to some extent is true, but people also must take some personal responsibility in being able to make themselves marketable in the economy today.

MARTIN: Great point, Natalie I certainly appreciate it. Ali what about that in terms of retraining and getting more skills?

VELSHI: Yes, Ohio, Michigan and Indiana, the Rust Belt States that had fantastic jobs in the auto industry and manufacturing and steel, all those things that were there. Those jobs are gone. I think there might have been one state that actually created manufacturing jobs.

The bottom line is you have people in their 40s and their 50s who went into industries where they were guaranteed a job for life, pensions and education. All of a sudden those jobs are gone. What do you do with a 40 or 50-year-old person to retrain them?

There are other jobs in America. They can be a truck driver; that's in great demand. They need teachers, we need nurses, we need oil rig workers.

MARTIN: That's right, folks who also pipe out these lines.

VELSHI: We need people -- if somebody has to tell you, you lost your job, we can retrain you. Here's where the new job is and they're going to help. And it's hard for people to find out on their own.

MARTIN: Right. Great point.

Back to Michigan. Mary? How are you?

MARY FROM GAYLORD, MICHIGAN: I say vote with our purchases. Buy American-made products to grow our economy. I can't stress that enough. Turn it over, see where it's made and buy American.

Make credit available to American on businesses that hire American workers and cut excessive CEO compensation. For goodness sake, stop allowing unions to vote away our jobs. Without jobs, no one can make their mortgage payments.

MARTIN: Hey, Mary, thanks so much. I appreciate it.

Ali, what about it? We hear buy American, buy American.

VELSHI: You'd be naked and you would have nothing in your house and nothing on your body. The bottom line is that is not practical. Her other points I think were very sound, but we can have an efficient economy where we buy things from other countries that are made cheaper as long as we're making something here that's of greater value that we're selling to them.

And that's how the world should work. The problem is we have an imbalance in our trade. We've got an imbalance where our workers go. We can lose jobs to other countries. That's the way of the world. As long as we bring some other jobs here that are of value. I don't think buying American makes sense but buying them -- what are you going to buy, a Ford, they're made all over the place, so is GM.

But the other stuff is right. We can do other things to make sure we do have jobs here.

MARTIN: To the Blue Grass State, Jerred in Kentucky. Hi, Jerred.


MARTIN: Great, what's on your mind?

JERRED: I just wanted to say that I have family that's in the Midwest going to Pennsylvania and places like that. And I think they're coming to the realization that they can come to the fact that manufacturing jobs are never coming back to this country. They are just not. Not in our global economy.

They were going to go where it's cheap. And it's hard because people sit there and think that the business was going to have compassion and businesses don't work like that. Companies care about profits and not the problems of Americans.

MARTIN: Jerred, you make a great point, I certainly appreciate it.

I want to squeeze one more caller, Mike in Virginia, another battle ground state. Mike.

MIKE FROM NORFOLK, VIRGINIA: Yes, Roland, a pleasure to talk to you. First of all, the 600,000 jobs that you folks cite, there are two reasons I think with all due respect, you are barking up the wrong tree.

Number one, I think they're a culmination of something that's going on since I was a kid and I'm a 59-year-old grandfather now.

I hear everybody saying the jobs have been going overseas and whose fault is it? It's not any one president, it's Congress. Some of those members of Congress have been there since I was 13 years old. That's where we really need to clean house and that's we're we really need to get the action taken.

MARTIN: Mike, appreciate it. Ali, can we actually blame Congress?

VELSHI: Mike makes a very good point. These manufacturing jobs are not gone because of one administration or one thing that's happened. We have been losing manufacturing and construction type of jobs for some time. Some of those will come back, but he's right. Most of them are not coming back. And we do have to change the system; we have to fix it.

MARTIN: Great point. Ali, hold tight.

Folks, every middle class family wants their kids to have a better life and that means college. How are they going to pay for it?



MARTIN: I hear people say the middle class voters who are white and those who are black, those who are Hispanic; people say they are voting against issues, voting against interest. And so, if you had to define what is the most important issue facing the "middle class," what issue, what is it?

UNIDENTIFIED MALE: Education. Cost of books.




MARTIN: That was earlier this week, the National Black NBA Conference in Washington, D.C.

A good education was also the most important issue in my family. My parents didn't go to college, but they made sure I did. All parents want their kids to go to college and they know they need to go to college, but how in the world are they going to pay for it?

What's the solution? Well, my good friend, Joe Pagliarulo, weighs in from San Antonio. He is the morning host of KTRH in Houston and afternoon host at WOAI in San Antonio. See, the economy is so bad, Joe, you have to have two jobs.

JOE PAGLIARULO, RADIO TALK SHOW HOST: That's right. I have got two jobs and I can barely make it, Roland. I can't believe I went to college.

MARTIN: What's going on here? Look, Sallie Mae said credit crisis is so bad, we are not going to be handing out many more student loans. You have got have parents saying I cannot afford to send my kids to college. We are hearing a little bit from these candidates. What should they be saying?

PAGLIARULO: Well, I think we're going to hear a very little bit from. I think that they are bogged down in another stuff right now.

But Roland, I mean frankly before we get to college, my good friend, we have to get kids graduated from high school. And that's not happening because the public school system stinks in this country. I don't think the government ha done the right job to try to fix that. "No Child Left Behind" by President George W. Bush and great in theory and sucked when he tried to put it into place.

MARTIN: No, I disagree with that.


MARTIN: And the fact of the matter is, there were elements of "No Child Left Behind" that I felt were important in terms of accountability. Now, there's a need to be fixed and tweaked, yes; but should it be gotten rid of? No.

PAGLIARULO: There's one good reason why it's not working, Roland, and you and I talk to parents every day in our radio shows. There's one big reason why it's not working. Teachers started teaching to a test and they weren't teaching the three R's.

MARTIN: I got that.

PAGLIARULO: They weren't teaching what you need to know to get out into the world.

MARTIN: Joe, I understand that but you have got to have accountability though.

PAGLIARULO: I do understand that. But you have got to get better accountability to find out exactly what these kids are learning. Not one standardized test that said Bobby either got an F or an A. And if it's an F, the school closes down. The school will do anything to stop from closing down.

MARTIN: I agree. PAGLIARULO: What has to happen here, I told you about this in my e- mail and we talked about this one on one. Vouchers have to happen. McCain is for them and Obama is not and here's why.

MARTIN: First of all I disagree with -- but Joe, vouchers are a small part of the solution. The reality is --

Here's the deal though. I understand in terms of secondary education, but the fact of the matter is when it comes to middle class families trying to pay out, trying to sit here and send their kids to college. Tuition is going up all across the country.

Candidates as far as I'm concerned should be investing more in our future for those who are going to college as opposed to cutting grants and student loans.

PAGLIARULO: Well, I agree with you but only if there is a driving desire and ambition on the parts of the students and the families.

MARTIN: But they want to go.

PAGLIARULO: You say, all parents want their kids to go to college, I don't agree with you. I don't think all parents, Roland, are as invested in their kids' education as you think they are.

MARTIN: But Joey, the people who want to send their kids there they're saying we can't afford it. Not even state schools now. Forget private schools.

PAGLIARULO: And you know I love hearing about your personal experiences. Here's mine. My family was middle class as I was growing up; lower, middle, then it got to middle, they got to upper middle after I moved out. But the bottom line is, they couldn't afford to send me to college.

Guess what, I went to college. You know how. I got me some scholarship. I went, I tried out and I had drive and ambition and desire and I was able to get a full vote to a community college where I went for two years before I can move to one of those bigger colleges you were talking about.

It takes drive, desire, and not entitlement. Nobody should sit back and say the government owes me an education.

MARTIN: Well, first of all. I think a lot of conservatives throw entitlement out as though somehow it's a bad word. Trust me, Wall Street right now is entailed to the Federal Reserve, but your point about community colleges.

My wife is a dean at a community college in Chicago and we talk about rebuilding the middle class. Many of those jobs that we talked about are middle class jobs, community colleges train folks for it and I don't think McCain or Obama is stressing that issue enough in this campaign.

PAGLIARULO: Are you suggesting that we just give everybody a free community college education?

I say no because a lot of that money will go to waste because people don't care. And some people don't want a college education. If you want it, if you desire it, if you got the driving ambition, you can get it in the government absolutely.

You and I will agree. The government should step up and hook up a family who wants to send their kid to college and that kid wants to go and be a productive member of society. You and I agree on that.

How do they do it? I don't know. McCain and Obama aren't talking about it. You're right.

MARTIN: Well, I think we have to pressure them on that.

I want to get a couple of phone calls in, Joey. Let's go to Jane in New Jersey, Jane?

JANE FROM BRIDGETON, NEW JERSEY: Hi. I think a lot of what the challenges that we are facing is people's general attitude as far as me, me, me. I know personally if they put in front of me a solid plan to solve education and health issues, I would pay more taxes for that. It would have to be a solid plan.

And I do think education is the key whether it's primary, secondary, or college. I think the government needs to step in and help the states out. We just can't afford it.

MARTIN: Appreciate it. Go ahead.

PAGLIARULO: I was just wondering how exactly should the government step in? The government says, hi I know you have a kid who is 16, here's $10,000 or has your child shown a good grade record? We should reward people for good academics, for good community service. We should reward kids who have drive and desire and ambition. I keep on saying this words because they mean something.

MARTIN: But Joey, that sounds to me like a plan. That is laying it out there.

PAGLIARULO: It is a plan that you are not hearing from either side right now, but I have to go back to the word entitlement, which I'm not saying is a bad word. I just don't think anybody is entitled to anything as an American. You are entitled to what you work for. That's what I believe and that's what you have achieved and I'm starting to achieve as well.

MARTIN: I agree but also I do believe we are entitled to a first class education; elementary school, high school and junior college.

Joey, I certainly appreciate it.

PAGLIARULO: Roland, good seeing you.

MARTIN: Have fun in my hometown of Houston. Thanks a bunch.

Forget Wall Street, forget bail outs and handouts. What you must do to take charge of your money; that, when we come back.


MARTIN: America, we can talk all day about bankruptcy, getting help when it comes to your mortgage and how to battle job loss and everything else, but we must also make some changes in our lives.

First live within, not above your means. Everybody wants a dream house, but if we are not in a financially sound place, don't go for it. Please be patient. The stress of meeting that mortgage is far too great.

Credit cards get rid of them. When I was at bankruptcy, it was all about pay as you go. If I saw it, liked it and have the money, I bought it. No money, I didn't buy it. We can't keep buying and buying and buying on borrowed money and not think it won't catch up to us. That's Wall Street.

Also, save, save, save. You might not be able save hundreds of bucks a month, but put away $5. It's not a lot, but it still allows you to create a nest egg for tough situations. We heard those stories tonight.

Lastly, build your skill set. No job is promised. No job. So always make the effort to learn more and do more to make yourself marketable.

That's all we have for tonight. Be sure to join us next week when we discuss the first presidential debate between Senators John McCain and Barack Obama and what they didn't talk about.

Have a good night.

DON LEMON, CNN NEWSROOM: Hello, everyone. I'm Don Lemon at the CNN World Headquarters. We want to get you up to date on what's happening right now.

FBI agents and state police have raided an Arkansas Evangelist headquarters today as part of a child porn probe. You're seeing what is apparently the Website of the Tony Alamo Christian Ministries near Texarkana. An FBI official says there are allegations, children who live at the compound may have been sexually and physically abused. Alamo was not there at the time. He denies the allegations tonight.

Just look at the panic in Pakistan at a hotel packed with Westerners. An enormous suicide truck bombing, it happened just hours after Pakistan's new president promised to root out terrorism. The blast ripped right through the Marriott in Islamabad killing at least 40 people and wounding dozens of others. We're told one American is among the dead and another is reported wounded. We'll update you at the top of the hour on this, at 10:00 p.m. Eastern.

Two celebrity entertainers are listed in critical, but stable condition tonight. They were in a charter jet crash that killed four people. Former Blink 182 drummer Travis Barker and club disk jockey DJ AM had just performed a concert in Columbia, South Carolina. Their Lear jet crashed as it was taking off from the Columbia airport overnight. Barker and DJ AM were the only survivors.

We want you to check out this video. This is coming out of San Diego, California. These boats, you know they go really fast. So fast they can catch air and you can see that's exactly what happened. This horrific crash happened as they were practicing and the driver of this boat suffered only minor injuries.

We'll see you at 10:00 p.m. Eastern here in the "CNN Newsroom."