DAVE RAMSEY, HOST: Welcome to The Dave Ramsey Show"," where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice.

I am Dave Ramsey, your host, and this is your show, America. It's a show where we take your calls, your questions, your e-mails, your Twitters, your Facebook comments, and we interact with you on Main Street about money and about life. When things are going well or when they aren't. And we get to answer your questions, and all of America is entertained by you. But just kidding. No, not really, they really are, that's why the ratings are so good.

Turns you like talking about you more than whatever the talking heads on the networks are talking about today. And that's what we're going to spend our time doing today. Also, we're going to do some thing that is a brand new thing for "The Dave Ramsey Show." We have never in the history of "The Dave Ramsey Show" two years on the air had a politician on. And the reason is I just generally don't like them.

(LAUGHTER)

I'm sorry. I don't want to deal with them. But I will tell you I'm making an exception today because I found one I like. In all seriousness, there's a few of them out there that are all right. But you and I, we're going to work together on your stuff and Washington, what happens in the White House is not as important as what happens at your house as far as I'm concerned.

But we've got some important stuff going on in this country. And this is an important book. So I wanted to spotlight it. And so we are going to have a first. We're going to have a U.S. senator on the show. Jim Diment is going to be with us. Jim is one of the good guys. He's written a book called "Saving Freedom". And I want to talk to him about why a senator writes a book and what he's got to say about saving freedom because it's my personal opinion we're losing lots of it on a daily basis these days. The government seems to be taking over every little corner of our lives. Regulatory, and legal, and statutory input into every single thing we do is growing at leaps and bounds, all in an effort to take good care of us, of course.

But we've lost our rights. And we're losing them more and more. And I want to talk about that a little bit, because I'm not real happy it. I'm kind of an old-fashioned guy. And I'm one of those guys I would just as soon government leave me alone. You know what I'm saying here. And yes, I mispronounced that on purpose, shut up!

Okay, so we're going to talk about it. We're going to have Jim on -- Senator Diment, I'm sorry. See, that's why -- I don't know how to talk to these people. And we're going to have Senator Diment on and talk about saving some freedoms. I think that's a good idea. In the meantime, we're going to take your calls and questions about life and money.

Our phone number is 1-888-825-5225. That's 1-888-825-5225. Or you can come online -- go online at daveramsey.com. Click on Dave's e-mail. Keep those brief and to the point and we'll do our best to answer them as a part of the show this evening.

Thanks for being with us. We're going to start with Indianapolis. And Mary is on the line. Hey, Mary, welcome to "The Dave Ramsey Show." How are you tonight?

CALLER: I'm great. Thank you for take my call.

RAMSEY: Sure. How can I help?

CALLER: Well, my question is about how to guide my son. He is 20 years old. And he and his fiancee moved in together last fall. Her parents and my husband and I urged them not to, but they did it anyway. Initially they were -- said that they had plenty of money and everything was covered and they didn't have any worries. But life kind of got in the way. They had a couple of emergencies. His car broke down. And then his hours got cut at work. And she lost her job, which she is starting a new job here in a couple weeks.

But not really sure. I don't want to take the responsibility away from him, but I also am not ready to turn him totally loose of him yet. I know that he -- they don't have enough money. I don't see how they can have enough money to live on. And I'm not really sure what to do to help him or to guide him through this. What is your suggestion?

RAMSEY: Well, I mean, you know, it's interesting that he picks and chooses which times he's going to take your advice.

CALLER: Right.

RAMSEY: Which makes him 20.

(LAUGHTER)

CALLER: Yes. Exactly, 20.

RAMSEY: Okay. I -- you know, I'm not a family therapist so I'm not sure. I'm a dad of a 21-year-old, a 23-year-old, and an 18-year-old, soon to be 18. So, we've kind of got this dynamic going on around our place from time to time, too.

My kids have had a real strong understanding from their dad early and often since they were little, that I do not finance people's lives who are engaged in activities that are doing damage to them.

CALLER: Right.

RAMSEY: And so if you're doing drugs, I'm not going to pay your light bill. If you're shacking up with somebody, and that's doing damage to you, without the benefit of matrimony.

CALLER: Right.

RAMSEY: .then I'm not paying your bills.

Now, if you don't see anything wrong with people living together, then you know, you can pay his bills. That's okay. I - you know, my value system dictates otherwise. And I'm not mad at people that are shacked up, but I'm not going to pay my kids' bills if they go live in a way that isn't congruent with my belief system. Does that make any sense?

CALLER: Right. But we're not paying - well.

RAMSEY: I know, but you're having the opportunity now to help them financially because they're struggling in the midst of living a life that you didn't recommend.

CALLER: Well, we're not -- I don't really want to financially help him. I'm trying to figure out the best way to guide him, because I don't think he -- I know he wasn't prepared for this, even though he jumped into it. And he's learned a lot the last year. I don't want to pay for his bills.

RAMSEY: Oh.

CALLER: And I'm trying to find the right way to guide him, to tell him what to do, or what advice to give him to do.

RAMSEY: Well, what do you want him to do?

CALLER: I want him to move back home.

RAMSEY: Okay. Why don't you guide him that way?

CALLER: Well, that would be.

RAMSEY: This little experiment of yours has blown up. It didn't work.

CALLER: Right.

RAMSEY: Her parents told you guys that. We told you that. And for the remaining time of the engagement, why don't we live separate sexual lives, in purity and move forward towards our marriage with a different mindset and financially have the blessings of being in the parents' house for a short period of time here and piling up some cash and cleaning up your mess.

CALLER: Okay.

RAMSEY: Would that be a bad thing?

CALLER: No, it wouldn't be a bad thing in my mind.

RAMSEY: And if he chooses not to do that, then he, you know, there's nothing you can do. All you can do is extend a hand. But my hand is a hand of help, it's not a hand of enabling. And so, I'm not going to, you know, extend one hand without the other. In other words, you can't live in my house and sleep with her.

CALLER: Right, right.

RAMSEY: That's how that works. I'm old-fashioned. And I know some of you out there watching this are thinking I'm some kind of dinosaur or whatever, but that's, you know, you're talking to me about what I would do. And that's, you know, that's how I have to answer it.

So and I'm not mad about this. This is not -- I'm not hateful about it. And you're not either. I don't hear a mean spirit in your voice. And you don't dislike this girl or anything like that.

CALLER: No, no.

RAMSEY: You didn't say any of those things.

And so what is best for this young couple, for you and I, a couple of old codgers who have lived life a while and we've seen all the disasters. And we can back up with a thing called experience and view it, and say, gosh what's best for this young couple as the best way starting today to make their life better going forward?

And it would be a move back into the respective households, pile up some cash, get their financial lives under control, and learn some restraint. And that'll be a blessing to their marriage going forward. That's my view on it. Am I much different from you?[...]

CALLER: No, I think they would get married tomorrow, though. I mean, I think if that was the case, they would say okay, we'll get married tomorrow.

RAMSEY: Okay.

CALLER: And then they're still in the same financial situation.

RAMSEY: Okay, then we've got to sit down and look at their financial habits and their income versus outgo. And we can make them some suggestions on that. If you got a car you can't afford, have you two rented an apartment you can't afford, are you not working enough, is there not enough income coming into the house. There's only two sides to the equation, income and outgo.

CALLER: Right.

RAMSEY: And we got to work on both sides.

CALLER: Okay.

RAMSEY: And you can unpack all of that with them. But I'm not going to play paddy cake with them in that counseling setting. Personally, I'm not going to and assist them in, you know, in going in a direction that I don't think is good for them.

Brandon from Michigan writes, "My girlfriend and I would like to get married. I can't seem to save up enough money to buy a ring because of my own personal bills. I don't have a credit card and my store credit isn't great either. Should I be thinking about getting married now?

I have no problem with people getting married that are in debt and broke as long as they're on the same page about money. And so the same page would be we're going to be doing a budget together after we're married. We're managing our money together. We're going to love each other well. We're going to spend time and invest in each other. And then in the process, we're going to not borrow money. And we're going to have an emergency fund. And we're going to live on a budget. And some of the basic stuff I teach here.

As long you're doing all of that, then you can get a starter ring to get married. And you can do that with working a couple of weekends as an extra job. And if you want to put some of your extra debt payment aside, and pile up a little money for a ring that's fine.

I got married 27 years ago with a ring that cost a thousand bucks. One of the diamonds on her current ring, I couldn't buy for not one of them, and there are many of them on the ring for a thousand bucks.

So she made up for it later. It's okay. And she'll come out. Or not. If she was still wearing the thousand dollar ring, she'd probably had a pretty good life

So, you know, the price of the ring, there's no correlation between price of ring and success of marriage. As a matter of fact, there might be an inverse correlation. Very possible.

Allison from Michigan writes, "My husband and I bought a house last year and we need a new roof. We have enough in our emergency fund to pay for it, but it would take it down by half. And we hate the thought of that. I've heard you advise people to stop funding the retirement until they're out of debt. Would it be wise to stop funding our retirement and pile up extra money for a roof? We're out of debt except for the house, and make about $108,000."

No. I wouldn't stop funding my retirement for a roof. I think you do the roof and then you replenish the emergency fund, a little bit as you go along until you get it back where you want it. I don't think this is a panic. You make plenty of money. You might have to stop going out to eat. Oh! You might have to not buy a purse. Or you might want to avoid something else, like a vacation to get the roof. I don't know, but I think we're going to do retirement. That would be my plan.

We'll be right back with more of your calls. Our phone number here is 1-888-825-5225. You're watching "The Dave Ramsey Show" on the FOX Business Network.

(COMMERCIAL BREAK)

TIME STAMP: 2012:04

(BEGIN VIDEO CLIP)

MATT: Hey, Dave, my name is Matt. And I was wondering if I should borrow money from my 401(K) to put more money down on my new house?

(END VIDEO CLIP)

RAMSEY: No. Now, why not? Why would I tell people not to borrow money on their 401(K). After all, Dave, if you borrow money against your 401(K), you pay yourself back the interest. And it's 5, 6, 7% somewhere in there. And I'm paying myself that. You can't get that at the bank these days.

Well, there's a couple of problems with that theory. The biggest problem with the 401 - well, let's go to the smallest one. The smallest problem with the 401(K) loan is you unplug the mutual funds while they're down and they're headed back up. And you stand a really good chance of making a lot more than you would have paid yourself on those funds while that loan's being repaid. That's a minor issue.

The big issue is if you don't pay the loan back within 60 days of leaving the company, and you will leave the company, when you die, get a better job, or they lay you off, you will leave the company. And so, if you don't pay the company back within 60 days of leaving the company in full, the IRS considers that an early withdrawal. And they hit you with a 10% penalty plus your tax rate.

So the -- at the very worst possible time, a time of transition in your life, the 401(K) becomes -- loan becomes completely due. And we deal with people in a pinch all the time over this. and we tell them not to do it.

So rule of thumb, never borrow on your 401(K). If you're avoiding bankruptcy or foreclosure, and you want to pull some money out of your retirement to do that, pull it out. Pay the penalty, pay taxes. But never borrow on your 401(K). I do not recommend it, because you're setting yourself up for a problem. And about the time the 401(K) is in the toilet is about the time that the company lays you off, is about the time you're in a mess and you've got the least ability to handle the stress that that puts into your life. Don't do it. Please don't do it.

All right, let's go to Alma. Alma's in Nashville. Hey, Alma, welcome to "The Dave Ramsey Show."

CALLER: Thank you, Dave. It's so nice to talk to you.

RAMSEY: You, too. What's up in your world?

CALLER: Well, my mom's 77. And she's selling her house. And she wants to give each of us kids $10,000, as an early inheritance.

RAMSEY: That's nice.

CALLER: Yeah. But I want to know how do I have to declare that?

RAMSEY: You don't.

CALLER: I don't?

RAMSEY: No, neither does she, if it's under 12,000, an individual can give another individual $12,000 as a gift. There is no gift tax and there's no income tax. And there's no tax deduction for her.

CALLER: Well, that's good to hear!

RAMSEY: So nobody gets any benefit, except you get 10 grand and nobody gets any taxes, it's an easy deal. Smile, say thank you. Now, is mom in good shape financially?

CALLER: Well, I don't think so but she thinks so.

RAMSEY: So what kind of shape financially are you in?

CALLER: Well, my husband would like to be yelling, I'm debt free on the radio like now, if I'd let him. So, we are in good shape.

RAMSEY: Okay.

CALLER: Mom's in decent shape, she -- like I said, she's selling her house. And she's going to be moving in with my youngest sister. And.

RAMSEY: Well, I have a relative that gives us money from time to time, who seems to be in pretty good shape, I'm not sure. Okay?

CALLER: Yeah.

RAMSEY: But they seem to be in pretty good. But I'll tell you what we've done with that money. We've stuck all of those gifts into a mutual fund. And so, that mutual fund, in our mind is kind of labeled, help them if they ever need it.

CALLER: That sounds, good, too. Yeah.

RAMSEY: And so, if you don't need the ten grand, you could set it aside and just call that mom's money in your mind. And if mom never needs it, then it's yours. And it was a gift and it's fine. If you're in a pinch, you can use the money, certainly. And you have no obligation, morally, or ethically, or relationally or anything else to give it back. But if you're strong enough financially you could just set it aside. And you know, it's kind of laying there. And if they ever need help, then that's the first place to go to help them financially is to that particular fund.

CALLER: Well, that sounds like a good idea. I just wasn't real sure what we could, you know, what we had to do with it.[...]

RAMSEY: No, you haven't go to do anything with it, except enjoy it, and smile and give her a big hug and tell her thank you. That's very sweet of her to be that generous. And you know, I can relate as a parent and you can, too of grown children. And it's certainly, you want to se your children enjoy some of the money you're going to leave them while they are alive without running their life. You don't want to cripple them with making them stupid.

But you know, you want to see them - you know, you work hard to get that and so, she -- I can relate to her on that and you probably can, too. She wants to see you have some fun and enjoy your life.

All right, we'll be right back with more of your e-mails and calls. Our phone number is 1-888-825-5225. You're watching "The Dave Ramsey Show" on the FOX Business Network.

(COMMERCIAL BREAK)

TIME STAMP: 2018:50

RAMSEY: Tonight's "did you know", 60 percent of Americans do not pay off their credit cards every month. Well, that depends on who you read and who you believe. I've seen as high as 78 percent.

Bottom line is, there's a whole bunch of people lying to themselves, who say oh, I pay mine off every month, it's no big deal. Well, there's hundreds of millions of people who don't. That's what it comes down to. And they're playing footsie with some really dangerous products and some companies that can't be trusted.

Patrick is in Oshkosh, Wisconsin, Hey, Patrick welcome to "The Dave Ramsey Show." And how are you tonight?

CALLER: Well, I'd be better if I wasn't in such a bit of stress with our finances.

RAMSEY: Uh-oh, what's going on?

CALLER: well, I'll make it quick for you. In 2006, 2007, 2008 I had three separate knee surgeries. 2007 cost me my job. Me and my wife were making approximately $75,000 to $80,000. I've been now been working for about a year straight without any knee injuries. And we're making roughly about $50,000 combined.

RAMSEY: Cool.

CALLER: We do have -- pardon?

RAMSEY: Back to work is good.

CALLER: Yeah, exactly, but the money isn't. unfortunately.

RAMSEY: Right.

CALLER: Wife got insurance. She works for the state. So, we're covered in the that realm. But out of all of our bills with that $50,000, we were making ends meet quite well. Now we have approximately $220, $225,000 in debt that includes the house and the truck and stuff.

RAMSEY: How much of that's house?

CALLER: The house is - well, the value or what we owe?

RAMSEY: No, what do you oh? You said $225,000 in debt.

CALLER: About $160,000.

RAMSEY: Okay, so you got about 60 grand in other. So how much do you owe on the truck?

CALLER: 17.

RAMSEY: Okay. And how much do you owe on credit cards?

CALLER: Credit cards would be the remaining approximately $50,000.

RAMSEY: No other car payment, no student loans, no medical?

CALLER: Correct.

RAMSEY: Okay. And so you tell me you got about $33,000 in credit card debt?

CALLER: Roughly about 40 is closer.

RAMSEY: Okay. I got you. All right, cool.

CALLER: And with all this rigmarole going on, all of a sudden, interest rates starting jumping on the supposed 4.9, then it became 13.9. And last month, we fell short of making a payment on one. And that went to 29.9.

RAMSEY: Now who are the companies, the two that jacked the rates?

CALLER: Chase and Wamu, Citicorp. They all raised them, the Wamu I think chase bought them, is this one that.

RAMSEY: Yeah, you're dealing with universal default provisions. And they're jacking you on every chance they get. I got you.

CALLER: Yeah, and we want to pay it.

RAMSEY: I don't blame you.

CALLER: We filed bankruptcy about 8 years ago, 7 years ago. And we don't want to go down that road again. I mean...

RAMSEY: You're not bankrupt.

CALLER: No, I don't think so. But it sure as heck feels that way sometimes.

RAMSEY: Here's what I would do, okay. Number one, you need to get the car sold. Truck.

CALLER: Okay.

RAMSEY: And that $400, $500 car payment you're paying there is killing you.

CALLER: Okay.

RAMSEY: It's eating up what little money you got to attack this mess with. And then I would call each of these idiots' companies and say, I have limited funds. And so I have gotten the advice of my financial counselor. And he says to pay the company of the three of you, that gives me the lowest interest rate. The other one is not going to get paid. So, what's your bid?

CALLER: Okay, well, that sounds good.

RAMSEY: Okay, well, it's going to damage your credit, isn't it, because you're not going to pay somebody, but guess what? With the math you gave me, you're not going to pay somebody right now, right.

CALLER: Right.

RAMSEY: And so when you go into default, they're going to scream and holler because you've only been able to pay what you can pay. And instead of fighting with huge interest rates, let the one with the huge interest rate be the one that lapses. And you can go settle with it later. And do a settlement which does away with the interest rate.

Now, I don't want your credit to be destroyed but mathematically, you can't pull off what you handed me.

CALLER: Right.

RAMSEY: That's why you called me.

CALLER: Exactly.

RAMSEY: So something is going to go bad. We might as well choose what we're going to shoot. What area of your reputation do you want to be damaged? You might as well choose. If you don't, it's going to be chosen for you, because you're not going to live your life on purpose. Does that make any sense?

CALLER: Yes, it does.

RAMSEY: And they've done this. I mean, you've done it because you were so stupid, you got $33,000 in credit card debt. I done stupid thing, too. That's why I can call that stupid, okay?

CALLER: Yeah.

RAMSEY: So I'm not picking on you. I'm picking on what you did.

CALLER: Yeah.

A: But now and you signed up with some snakes. And now they're biting you, but they're snakes. And so they're going to hurt themselves because they jacked the rates on the very person that they didn't need jack the rates on. And so that endangers their ability to get paid. Duh! So there's consequences to their stupid actions, too. Right?

CALLER: Correct.

RAMSEY: So I don't fully sorry for them. Now I'm not setting out for to you harm you in order to hurt them either. That -- but if you can pay everybody, pay everybody. But my quick calculation in my head is you gave me your budget is you're probably not going to be able to pull one of these off, especially until the car is sold.

CALLER: Okay.

RAMSEY: And you need to choose who's going to not get paid, not based on who screams or threatens you, but based on who gives you the best interest rate. Somebody gives you a 3 percent, reduces it back to 4, that's the one gets all the money. The rest of them going to sit there.

Because basically, let's say you got one of that's $10,000. They play hard ball. They say oh, no, we're going to hold you 32 percent interest. Let it all pile up. That's fine. Becomes $15,000. We're going to go back and settle the thing for $5,000 anyway, two years from now when they haven't got any money and they're ready to deal.

CALLER: Okay.

RAMSEY: See how I'm doing this.

CALLER: Yeah but what about something in a sense like that with a possible garnishing of wages?[...]

RAMSEY: Only if they sue you. And they're not going to sue you as long as you keep messing with them. Long before they sue you, they're going to give you a deal which is settling the thing in full. Now they're going to tell you, the first moment that you're late that they're going to garnish your wages. And that's a lie. It's a bluff. Credit card companies do not sue people, until they're behind months and months and months, even years. And even then they don't often sue people.

CALLER: Okay.

RAMSEY: So it's a bunch of collections tactics, and all that kind of thing. So you know, you can give that a shot. It's going to be painful. And it's not without its dings and scars, but that's a shot for you.

Up next, Senator Jim Diment speaks out on reclaiming America's freedom. It's an important topic you don't want to miss. Stay with us. You're watching "The Dave Ramsey Show" on the FOX Business Network.

(COMMERCIAL BREAK)

TIME STAMP: 2026:54

RAMSEY: Within the walls between government and the private sector with those walls, getting thinner every day, Senator Jim Demint from South Carolina is sounding an alarm for all of us in his new book, "Saving Freedom". And we can stop America's slide, we can stop, that's an important phrase, America's slide into socialism.

He joins us now from our nation's capitol, breaking a record, being the first politician ever, on "The Dave Ramsey Show"! Welcome, senator.

SEN. JIM DEMINT (R), SOUTH CAROLINA: Thank you, Dave. I hope I don't ruin your reputation here, bringing a politician on your show!

RAMSEY: I think we'll be okay.

DEMINT: All right.

RAMSEY: Hey I appreciate you being with us. And I appreciate the title of this book. And you and I were talked off air right before you came on that this is an imprint that Ollie North, a buddy of mine and yours is involved with, that's published this book, Fidelis and a lot of mutual friends involved behind the scenes on this thing.

This is an important, important message. So, why do you write a book while you're in the this Senate called "Saving Freedom" with barbed wire across the front.

DEMINT: Well, so many people across the country, Dave, have asked me what can they do, to stop this rampage of spending and debt, that's going on at the federal level. You deal with it a lot at the individual level. And I heard you just tell one of your callers that he clearly could not make the payments, that he committed to. So something has to go.

Our country is at that point now, yet we keep coming up with new programs every day. "Saving Freedom" is about what made this country great, exceptional good and prosperous. And I'm pointing out those principles of freedom that are being -- removed from our foundation. And it's being replaced with this whole idea of government control and government ownership that a lot of people have called socialism . We need to understand the difference between freedom and socialism if we're going to save those things that made us great.

RAMSEY: One of the things I'm running into and you said something at the start of that, that piqued my interest. One thing I'm running into on my radio show in particular and somewhat on this TV show but more on the three hours of radio I do every day is a level of frustration from people who are not unintelligent. Most of them making payrolls or running businesses or leadership of some kind all across the nation.

This level of frustration that seems like no one in Washington is responding. One guy I heard called it called the nonrepresenting representatives. And you know, part of it came back to the bailout last fall and certainly, happened with the stimulus package this spring, that the huge volumes of e-mails and phone calls into someone's office that the populous does not want this piece of legislation, and yet, people of both parties stepping up and voting for the crap.

DEMINT: Yeah.

RAMSEY: How do we get past that frustration out here with us regular people?

DEMINT: Well, that's really what "Saving Freedom" is about, how people can take back their country and I'm encouraged by tea parties and encouraged -- I'm starting to see on YouTube of citizens going to town halls, when they - - their congressmen come home and trying to say they do one thing when their voters know they did something else in Washington. I'm afraid a lot of people here in Washington think Americans are either asleep or they're stupid. And they can get away with voting one way up here, that appeases some interest groups, and going home and telling people they are doing something differently. I think as Americans wake up, we can start to make a difference.

RAMSEY: Absolutely. That's true. And give some examples of stuff you are seeing inside the beltway that are causing the hair on the back of your neck to stand up. You're going, wait a minute, this doesn't sound like capitalism and doesn't sound like freedom. It sounds more like socialism.

DEMINT: You can go back to the stimulus. And when the economy is in recession, there are two ways you can help to improve the economy. You can leave more money with the workers and the businesses that are actually creating the jobs or you can take the money and spend it through government sources. Those are two different philosophies. The stimulus was a government centric, collectivist approach and it has not worked so far. And now we're trying to do the same thing on health care. Instead of encouraging interstate competition between insurance companies, giving people fair tax treatment when they don't get health insurance at work, they are talking about a massive government takeover that we can't afford, that is not going to work. We've never had a government program that worked before. But yet they are making all of these glowing promises about what we'll do with the government health care program.

I could pull my hair out as I listen to the promises because I have yet to see a federal program that worked effectively.

RAMSEY: The thing seems to be heading down a track. It has momentum, this locomotive. There seems to be no stopping it. There is a segment of our culture that is now like a spoiled kid on a cereal aisle throwing a fit that says, gimme, gimme, gimme, gimme. And they think their mommies lives in Washington. And they think somehow Washington will be able to deliver the goods to them.

So with that momentum -- and there is a tremendous political capital behind it as well.

DEMINT: Right.

RAMSEY: The thing seems to be -- it is shooting. Some of the legislation is blowing through there at a disturbing rate. And some of us are going, wow, I never dreamed, and really never dreamed, in 90 days, that we would see that kind of thing. Is there a way to put the brakes on this? You guys don't have the votes, do you, to stop it?

DEMINT: No, we don't. And you're right. In "Saving Freedom" I use a statistic that 52 percent of Americans get their income directly or indirectly from a government source.

RAMSEY: Geez.

DEMINT: It will be hard to stop the train. And I really do think we're on a cliff now. And it led me to say rash things like we have to stop the president on health care or he's going to blow through with cap- and-trade, electricity tax and other things that he has on his agenda. I like him personally. And I'd like to be able to support him, but if we lose the health care battle, Dave, I'm afraid we'll have so many Americans dependent on the government, we'll never get them to vote for less government.

This is a make-or-break time for Americans. And I think it is all going to depend on whether your listeners, your viewers actually contact their Congressmen and Senators, or maybe actually go out and hold a sign at their offices and say, get your hand off my health care!

RAMSEY: So in the book, "Saving Freedom," you outline some things. What is the plan to really save freedom? It is kind of a general, very overarching term, say we're going to save freedom. What should people outside of D.C. do? And why should they believe you, that they can do this?

DEMINT: It is really in their hands. And the last two chapters of "Saving Freedom" is an action plan and it tells people what they can do. It actually starts with the story of "It's a Wonderful Life," if you remember the Jimmie Stewart movie, where he was reminded by an angel of what a difference he had made as an individual that he didn't know about. And all of our lives are that way. And freedom begins with the individual. If we take responsibility for ourselves and our own families, and volunteer in the community and our churches, we're helping to save freedom without ever being involved with politics.

The people want to know what they can do to put a little more pressure on their elected officials. I give them a lot of examples of what makes a difference here in Washington. And frankly, I don't have the votes here to stop things, but I have seen on some pretty big legislation in the last couple of years, if we can get millions of people to write, e-mail, call and maybe even go out and demonstrate a little bit, we can change some minds here. And so that is what Saving Freedom is about. It's my cry for help to the American people to stand up and help us take back this country.[...]

RAMSEY: What, in your mind, happened last fall that was kind of the opposite of that? Because we literally had people on all of the shows on FOX -- and I was on a bunch of panels, and people are screaming and panicked and hysteria and everything else, including the entire Bush administration apparently. And we had people writing Republican Senators and Congressmen, and Democrats, Senators and Congressmen, and they were coming on television, on our shows and saying, we have 90 and 92 percent of the people in America against this. And yet I'm going to vote for it anyway. People of both parties did that. What happened to cause a large segment of your colleagues to completely unplug their brains?

DEMINT: They really did and -- I was sitting in the meetings, with Secretary Paulson and others, and the president saying our economy would collapse if we didn't pass this massive bailout TARP plan they called it. And I think a lot of people said, we don't understand this global economy, these people are telling us, it will collapse. But the information was not correct. And I'm afraid they suckered a lot of Republicans and Democrats into voting for it. And as soon as this got this passed, Dave, they didn't even do what they said had to be done, which was to buy up all of these toxic assets. They never bought one of them. And so, clearly, what they were telling us was not true.

So I'm so frustrated. And I have been critical of the Bush administration, the Obama administration. I didn't vote for it. I didn't vote for the stimulus. I'm not going to vote for a government takeover of health care because it doesn't make sense. And we're going down a road that has been proven in so many countries in history -- and I cover that history in "Saving Freedom." People tried socialism before. And you can call it collectivism or big government or liberal or whatever, it is socialism in my mind. It doesn't work. It destroys people, takes away our creativity and motivation and innovation, and the country ends up in so much debt, our prosperity disappears.

So, we have got to stop this. and we are close to the cliff. But Washington I think is out of control. And that is why I said, we have to stop it. We have to read legislation. We have to get the American people engaged. Hopefully, your viewers and listeners will help us do that.

RAMSEY: How long have you been in Washington?

DEMINT: I closed my business when I was 47 years old, a little over ten years ago, and I came to the House of Representatives. I term-limited myself to six years. And I was either going to go home or run for something else. And I decided to come over and try and change the Senate. So far, I haven't been very successful. So I have been here a little over ten years.

RAMSEY: OK. Total between the two houses?

DEMINT: Yes.

RAMSEY: OK. So what is your opinion of term limits, because there are a bunch of us out here frustrated that think that, every so often, the place ought to just be cleaned out?

DEMINT: I still -- I still believe that term limits would be the best reform that we could have for Congress and Senate, because I don't see anyone who has been here over ten or 12 years that is still fighting for those basic things we came for. It is always government-centric. The longer you are here, the more you see every solution has to have -- excuse me, every problem has to have a government solution. I still support term limits and I've limited myself in the House and I'm going to limit it in this Senate.

RAMSEY: For the record -- I have no idea what your answer was going to be -- and that is not on a question your people sent me. I was curious. For our viewers at home, that was straight up stuff. And I appreciate you, Senator, letting me throw a couple of those balls your way on that.

DEMINT: Sure.

RAMSEY: I love the quote from your book, "Government intrusion into the free market undermined personal responsibility and reduced incentives to work and save, and insulated people and businesses from consequences of bad decisions." Elaborate on that for a second.

DEMINT: Well, risk and reward are key parts of freedom. Success and failure is a key part of freedom. Most new businesses don't make it. But that is has made America much stronger, as we can kind of cull out those who don't make it. And some who don't make it the first time, like Walt Disney, after the third or fourth time, he does make it. And this ability to fail is key to our ability to succeed. And when the government starts to take all of the risk out of our society, and tries to cover our failure and bails us out, it actually kills the success. And it is maybe a hard thing for people to understand who haven't been in business, but risk and reward is what freedom is all about. And making our own choices and living with the consequences, is what freedom is all about. And the government is trying to insulate us from that. And it is just not working.

RAMSEY: Well, running towards success and away from failure will drive you to excellence and nothing else does.

DEMINT: That's a great quote there.

RAMSEY: I mean, that is exactly what you are saying. I would totally agree it.

Senator, we really appreciate you being with us. We're honored to have had you today. And, hey, you survived being this first politician on "The Dave Ramsey Show." Congratulations!

DEMINT: Thank you. And thanks for what you do every day. It is really important. Financial literacy is something that is woefully lacking. It's a part of being free, so thank you.

RAMSEY: Thank you. Thanks for having us. Thanks for coming on the show, rather.

The book is "Saving Freedom," Senator Jim DeMint. It is a book you need to read and it is a concept you need to grasp and wrap your arms around.

Some of you vote different ways than I vote or the way I think, and that is fine. I'll help you with your money anyway. That's no big deal. I'm not mad at you. But the idea that you can win in a culture where losing has been taken away is a bad plan. And that is part of system here. And you know, actual action plans are in the book, a good reason for reading it. You can get it on our web site, discounted right now, at DaveRamsey.com. And I recommend it to everyone. And you can find out more about Senator DeMint online by going to DeMint.Senate.gov.

Lots more calls and e-mails coming right up.

Don't go away. You are watching "The Dave Ramsey Show" on the FOX Business Network.

(COMMERCIAL BREAK)

RAMSEY: Welcome back to "The Dave Ramsey Show." We're glad worry with us.

It is interesting to talk to a politician who sounds like he believes in term limits. A good thing! Now, that is my idea. I think that a whole lot of good would be done for both parties, and for the country, if we just cleaned house every so often up there.

All right, Joy is in Jacksonville, Florida.

Hi, Joy. Welcome to "The Dave Ramsey Show." How are you tonight?

CALLER: I am excellent. Thank you for taking my call, Dave.

RAMSEY: Sure. What is up in your world?

CALLER: I have a quick question for you. It is a two-part question, if I can. First, are you seeing any leeway on the home modification or am I wishing for things that will not happen?

RAMSEY: I think I've talked to three people in all of our counseling outfits everywhere out there that have actually pulled off a loan modification. That's been a bunch of political huey. Washington has claimed they passed legislation encouraging and they're doing this and they're doing that to get the mortgage companies to modify stuff. I'm not seeing it happen. It could happen. I'm not above wishing for it or hoping for it, for you. But I wouldn't put all my eggs in that basket. I would have other plans. So tell me what's up in your world.

CALLER: We are in debt, $22,000, with credit cards and I'm trying the snowball. However, there is not enough money to even make a dent in one. We're treading water here and we're kind of...

RAMSEY: You're hoping for a mortgage modification?

CALLER: Yes, sir.

RAMSEY: To get your loan down to put towards the credit cards?

CALLER: Yes, we're trying to balance everything out. I read your book and I wanted to thank you for everything you have shared and...[...]

RAMSEY: How much do you owe on the House.

CALLER: We owe $191,000.

RAMSEY: What is it worth?

CALLER: 150.

RAMSEY: How much is your payment?

CALLER: $1600.

RAMSEY: What's your take-home pay a month?

CALLER: After tithing, it's $2300.

RAMSEY: Wow!

CALLER: Yeah.

RAMSEY: OK. And did your income go down dramatically?

CALLER: It did. Let's see, I want to say, within the past six months, it went down. I am having medical issues. I'm able to -- unable to work at this time.

RAMSEY: I see. Your household income -- basically, we lost your income?

CALLER: Yes, sir.

RAMSEY: Which was how much?

CALLER: It was $600 a month.

RAMSEY: 600 a month.

CALLER: But that made the difference.

RAMSEY: But if you are making $3,000 and you have a $1600 house payment, how were you making it then?

CALLER: It was the grace of God. Honestly.

RAMSEY: Yeah, I...

CALLER: And it was -- you know, everything didn't hit at the same time, you know. The mortgage waited until the 15th to make that. But...

RAMSEY: I mean -- 3,000 minus 1600, I have 1400 left to live on.

CALLER: Exactly.

RAMSEY: That's pretty tough.

CALLER: We have cash set aside to make the house payment until we could get -- because we had an adjustable rate -- until we could get it refinanced, thinking the housing market would go up.

RAMSEY: You bought it not being able to afford it, thinking you'd refinance later and you got a high interest rate. You got ripped off.

CALLER: We had the cash set aside, the amount of cash.

RAMSEY: You were subsidizing yourself and that's how you were making it?

CALLER: Exactly.

RAMSEY: That is more logical. And these numbers don't work.

CALLER: That what is we learned, from your book and Larry Burkett's book, is should only be 26 percent.

RAMSEY: Yeah.

CALLER: My question is...

RAMSEY: Is the house up for sale?

CALLER: No. We're working out the modification. They are telling us it is going to underwriting but I'm just...

RAMSEY: If they cut your interest rate -- what is your current interest rate?

CALLER: 6.5.

RAMSEY: OK, let's do math, all right? On $150,000, if they dropped your rate 1 percent, that is $1500 a year, $125 a month, OK? They drop your rate 2 percent, that is $250 a month. Still, doesn't work. They drop your rate 3 percent, give you a 3.5 percent mortgage, you still can't afford this house.

CALLER: OK.

RAMSEY: You see what I'm doing?

CALLER: I got you.

RAMSEY: You are over 50 percent of your take-home pay now.

CALLER: We should be at 26 percent, is that correct?

RAMSEY: I mean, you can afford a little more than 26 percent. I recommend no more than 26 so you can have a live and invest and give and, you know, all that kind of stuff. But, wow! You know, the bad news I got is, if I were in your shoes, I would put the house up for sale because I don't think you're going to keep it. I am afraid you will get boxed into a corner and end up losing it, because you just don't have the income to even come close to covering debt service of any kind on $150,000. And that is going to mean that you short sell the house. You're going to have to get them to accept the payment, I mean, a pay off amount for less than this amount owed. Wow. I wish I could be more help and had better news, but I don't see this numbers working, darling.

Answers to more of your questions coming right up. Contact me at Daveonair@DaveRamsey.com.

You're watching "The Dave Ramsey Show" on the FOX Business Network.

(COMMERCIAL BREAK)

RAMSEY: Welcome back to "The Dave Ramsey Show." We're glad you are with us, America. Thank you for joining us. It is a show about you. And we appreciate you being here.

Let's go to Lincoln, Nebraska, and talk to Barbara.

Hey, Barbara, welcome to "The Dave Ramsey Show." How can I help?

CALLER: Hi, Dave. It's an honor to talk with you.

RAMSEY: You too.

CALLER: I have a question. Actually, my husband and I -- well, it was before we were married -- took out a loan from family members, his family members and it is -- total -- to put repairs on our house we bought -- he had bought, and now it is ours. And it totals about $25,000. We paid over 5,000 on it already. But I think it is about time that we pay on it. We don't have any credit card debt but we do have student loan debt that comes before this family loan in our debt snowball. Do we just like put the family debt ahead of that one even though it is little -- little more than the loan?

RAMSEY: How much is the student loan debt or credit card debt?

CALLER: The student loan, I have one, 5,000 and one that is 20,000.

RAMSEY: And this is 25? Are you paying monthly on the 25?

CALLER: On the family loan, yes. The student loan, I have a few more weeks before I graduate.

RAMSEY: How much is the -- how much do you pay monthly on the family loan?

CALLER: Usually $100 a month.

RAMSEY: Is that an agreed amount or is it just kind of...

CALLER: It was never -- never agreed amount. We just kind of pay. And after we had the first child -- we used to pay 500 a month and then we had our first child and dropped to it 100.

RAMSEY: Who is the money owed to?

CALLER: His parents.

RAMSEY: And are they needing the money or are they upset or...

CALLER: I don't know that they need the money. But, I mean, it is rightfully theirs and...

RAMSEY: I was not going to not pay them. I'm asking about their attitude.

CALLER: They bought your books for Christmas and, I mean, there are subtle hints...

RAMSEY: That is a hint to get your financial act together and get out of debt.

CALLER: Well, yes. But they don't say they need it right now, but I kind of feel that maybe we should push them ahead of our snow ball.

RAMSEY: I wouldn't. I might raise the payment amount to 200, 300, 500 back again and that will slow down your debt snowball a little bit, and that is fine. And it will speed up their repayment a little bit, and that is fine. But I think, more than anything, you have to get on a system where you are writing down every single month, on paper, on purpose, where every dollar is going. And you're attacking the smallest debt with a vengeance. And you haven't started doing that yet.

CALLER: We just kind of -- I was trying to pay our student loans, because they are smaller, but there is nothing due as of yet.

RAMSEY: I'm talking about minimum payments on everything that is due right now. And you list your debts, smallest to largest. And what is your smallest debt, the $5,000 student loan?

CALLER: Yes.

RAMSEY: What's your household income?

CALLER: We made over $90,000.

RAMSEY: When do you graduate from college, or have you?

CALLER: In two weeks.

RAMSEY: Congratulations.

CALLER: Thank you.

RAMSEY: And how much will you make in your new job?[...]

CALLER: Well, I have to finish my hours so that I can take my exam, and then hopefully I'll make around $60,000 to $80,000.

RAMSEY: In addition to the 90 that there is?

CALLER: No, I produce about 30, 35 of the 90.

RAMSEY: You'll know to $140,000, $150,000 household income though?

CALLER: Correct.

RAMSEY: That will be cool. Well, let's put them at $500 and let's list your debts, smallest to largest, pay minimum payments on everything, and live on beans and rice, no vacations and no restaurants, and get ourselves out of debt. Pretty quickly you will knock out your student loans, and pretty quickly following that, you'll knock them out, because you're making a pile of money.

CALLER: Yes.

RAMSEY: You'll have to get on a written plan and make the money behave. No, I wouldn't put them in front of it but I would kick it up to $500 and be willing to show them a budget and some excitement and some focus and some sacrifice on your part that indicates they are going to get paid. They'd rather see you get control than you do something silly and not be in control.

Up next, we'll check out your e-mail comments and find out "What's on Your Mind, America."

Don't go anywhere. You're watching "The Dave Ramsey Show" on the FOX Business Network.

(COMMERCIAL BREAK)

RAMSEY: This is where we find out "What's on Your Mind."

Amy is in North Carolina. She writes, "My husband and I never thought we were bad off having only a mortgage, student loans and small amount of credit card debt. We were current on all things, but we were never able to look very far ahead financially. We now have the knowledge we need to be able to look ahead and are no longer in denial about our lack of savings and security. Your advice will actually allow us to retire."

That is right, with dignity and without the government. Whoo-hoo.

Matt from Indiana writes, "We paid off the nasty Discover card." Good! "And once the account showed zero, we called them to close it after calling about 20 million times to get them to drop the rate on the card from 24 percent and them not doing anything. The flopped on the floor and foamed at the mouth because we were closing our account. They were going to give us a 1.6 percent interest rate. And how could we live without their credit history? We got some satisfaction from their antics. Thanks for all you do."

You know, when companies misbehave, people quit doing business with them and it changes your life.

Laura from Indiana writes, "I am thinking of writing a book, "1,000 Ways to Eat a Hotdog." Ew! "Endorsed by Dave Ramsey." Not likely. "Eating hotdogs for lunch practically every day while trying to stay focused. My husband and I have finished reading "The Total Money Makeover" and hope to attend Financial Peace University in the fall. Hope to call in debt free in 18 months."

Awesome. And hotdog free as well. I ate tuna fish when I was broke. Still, when I smell tuna fish, my net worth goes down.

Thanks to our producers Blake Thompson and Diane Kay. Our associate producers are Lara Johnson and Allison Kurtzman (ph). Our director is Allison Estees. And our chief engineer is Matt Aaron.

Folks, it is up to you. You can do the stuff we talk about here every night. It is called living like no one else so that later you get the opportunity to live like no one else.

Thanks for watching. We want you to have a great night.

END