expecting the law to add 9% to their cost. someone here says guess what they're cutting to pay that extra 9%? jobs. hi, everybody, i'm david asman. welcome to "forbes on fox." let's go in focus with steve forbes, elizabeth macdonald, rich karlgaard, quentin hardy and stephane fitch. steve, a lot of companies say this will cost us more and we can't afford to hire more workers. >> it's very basic. when the cost of hiring goes up, you do less of it. if you don't know what the rules of the game are, you hold back. that's why the cash is not put to work. it's having more perverse effect on small businesses. they're in a mood to shovel it off to the government. yes, it is costing jobs. basic arithmetic. higher cost of hiring, you do less of it. >> david: basic arithmetic. you ensure 20 million more -- insure 20 million more people, it will cost money. >> be clear. this is an argument about perception. they think it is going to go up by 9%. the democrats think their message isn't going well so they should change it. 20% of the country thinks obama is a muslim. sometimes people just don't have facts at hand. an independent study calculated costs might rise one or 2% over ten years. that didn't calculate savings from having the whole group covered when it drives downs the emergency care cost. you really don't know where this is going to go. companies are saving money, because there is going to be no more stimulus spending. they will be on their own to and corporate profits are under threat. >> david: rich, the fact is pencil pushers very often do have it wrong. but they spend a lot of time calculating things, business have to forecast in the future to know how they will spend money now. right now they're forecasting a 9% increase in healthcare cost because of the new law. >> yeah. you don't just have to talk to pencil pushers to get to that number. talk to employers from sales. when you talk to small employers you get stories like this. it will cost $80,000 a year to hire somebody who i'm going to pay $50,000. not all of that is health. but it's the sum total of all the regulatory overhead that you have. if you talk to large controllers -- i have big controllers living on the block, ibm and a, and if you talk to them at block parties they're nervous adding to the payroll in the u.s. because of the regulations including healthcare. >> david: stephane, the white house is nervous. democrats are nervous. that's why they are changing their message about this in terms of whether it will save money or not. >> we all want to be invited to rich's block party to get better jobs but this healthcare thing may be a job creator. you make it a little easier for the individual self-employed entrepreneur to get healthcare. ignore the silly 9% number which isn't far above the 7 number of recent years and by the way is a non-scientific survey. the real number to focus on is the 13% of employers who say we'll now start covering kids even if they are sick. it's illegal to deny kids coverage. i think it's good for american competitiveness. >> david: victoria, talk about non-scientific. calculations saying we were going to save money insuring 20 million more people, a lot of people were questioning the science behind that as well. >> oh, sure. we're not going to save money. everything about this bill increases the cost of insurance. stephane, if you look at a small business, this doesn't make it easier. i've spent time this morning looking at what a small business has to do to figure out if they qualify for the wonderful tax credits. it's a labyrinth. small business owners will spend inordinate amount of time just figuring out who they have to insure and how and whether they can qualify for the tax credits. these are all things that stymie small businesses from hiring, from expanding and even from starting in the first place. >> david: e-mac, even medical businesses. i was talking yesterday on the business channel to the head of the cleveland clinic, praised by president obama and others. he said this is going to force costs to go up. even people in the medical business agree with this. >> the medical business sees it coming. and the chief actuary of medicare put out a damning report saying this is fantasy land accounting, cost-saving. a lot of studies such as being cited to provide savings in the system are based on, in other words the chief actuary from medicare saying the cost saving promised in the healthcare bill is fantasy land keeping. he is saying, you know, to deliver the cost savings, you have to be easy to, you know, herd gnats through a hurricane. it ain't going to happen. if you look at companies, at&t, caterpillar, deere, talking about it hitting the bottom line. surprisingly, ups saying one part of it, retiring drug cost won't effect them, it will be fractional. >> david: with due deference to our friends, i believe those at the front line of the cost to lose or save money and they expect more cost coming down the line. >> that's right. we don't have to see the bill come in effect. look at massachusetts, which obama praised as the basis for obama care. massachusetts care has been a disaster. costs are going up. businesses are leaving the state. jobs are being destroyed. hasn't fulfilled any promises. real-life laboratory and they're saying don't do it. >> david: that was started by a republican, we'll emphasize. started by romney. so republicans and democrats have it wrong when they put the state in charge of healthcare. >> why would i be happy to hear that? >> david: because you're so against republicans. >> no i'm not. i'm interested in the truth. the reality is for some reason in this country we think it's good idea to tie employment to healthcare. people should be covered. why is employment tied to healthcare. why is it that you need to have a job to be covered, to have healthcare? >> but this bill made that connection even tighter. it didn't solve that problem. it did the opposite. >> i know. i agree. >> you know what it ignored -- this is so awful. because in my mind we should have had an interstate competition, interstate market rather for health insurance. we have it for auto and life insurance. >> absolutely. >> it does nothing to insure that. instead it has jerry rig insurance exchange run by the state. in california, they saw their own health insurance tank in the '90s because it flopped basically. they couldn't do their business right. >> david: victoria, quick, and then rich. >> well, you know what? this bill is less choice for everything. little things like everyone has to be offered preventive care services. well, maybe you're pretty healthy and you don't need a news pamphlet on preventive care services. you're still going to pay for it. >> david: rich, go ahead. >> from 1982-2006, great bull market period, growth was 10% compared to western market where their growth was only 2%. we substantially outperform the countries that we are basing the healthcare model on. something doesn't add up. it's foolishness. >> david: stephane? >> rich is raising interesting numbers. that period was lovely, but are you suggesting that the reason we had all that success is because we denied sick kids healthcare? that we had lifetime limits on? i'm sorry, but i just don't believe giving sick kids healthcare means that's good for business. i have a feeling we can work this out. >> david: go ahead, rich. >> stephane makes the hard case. i'm talking about the overall economy. you can always make the hard case. the regulatory and tax overhang is really paralyzing employers right now. >> david: last word from rich. thank you, gang. coming up next, president obama out saying social security needs modest changes. "cashin' in" gang says look out. modest usually means something massive is on the way. but first, is our stimulus feeding the dragon? as china knocks off japan as the world's number two economy, who worries our megastimulus money helped them do it? is that true? find out next. ♪ just one bite opens a world of delight... ♪ ♪ savor and explore, the great indoors ♪ ♪ friskies indoor delights. ♪ feed the senses. from america's news headquarters, i'm juliet huddy. t a second farm is recalling its eggs. there is a possible salmonella outbreak linked to the eggs. at least 1300 people may have been sickened. it includes eggs sold in five brands in 14 states. to check if your eggs are safe, go to foxnews.com. we posted information on the eggs affected by the recall and information on salmonella. the founder of website that leaked documents, is accused of rape in sweden. there is an arrest warrant for julian assange. he's the founder of wikileaks leak who posted classified documents about the afghan war. i'm juliet huddy. now back to "forbes on fox." [ chanting ] >> david: this week, china took out japan to become the second biggest economy in the world and now it's gaining on the u.s. guess what is helping them to do it? america's stimulus money. at least in part. some economists are saying stimulus money is passed to china and other foreign firms. this is more proof that the stimulus is not working? >> it is proof that the stimulus is not working. we're overspending, overtaxing, overregulating, which is why the economy is lagging. we're setting a bad example for the rest of the world they're turning away from. spending does not work. when will we learn what europeans learned ten years ago? >> david: emac? >> i have to agree with steve. this stimulus package was so structured incorrectly from the start. only $230 billion going toward infrastructure updating of the highways and bridges and roads, and only $66 billion spent there. chi china, as mike is going to say, and i don't mean to steal your thunder, china is doing it right with their own infrastructure spending. this should have been done from the get-go to create jobs instead of american money going overseas. >> david: again, our money, $2 billion, 79% of it going to foreign firms. >> one thing that disturbs me is the u.s. productivity is declining while japan is still going up. with the stimulus money we neglected -- we put in housing, we have neglected other industries. >> david: stephane, it's hard to convince americans it's good for us if our money goes to china. >> yeah, it is, but golly, can we come to peace with this? i mean, you know, yes, some of our stimulus money helps china. some of their money buys our bonds and helps us back. this is how global trade works, folks. americans as individuals or sometimes through their government buy stuff in the best place they can find it. if that means buying cheap plastic crap from china, that's where we go. >> dude, wait a minute. wait a minute. by neglecting our economy, the stimulus money hurts our economy and make the bonds less attractive. it doesn't make them buy more bonds, you don't make them buy bonds by hurting the economy. >> i know, but it hasn't happened yet. >> david: hold on. the fact is there is a difference between the public and the private sector. folks would say what happens in the private sector has to be distinguished between the tax money going to chinese companies. >> i would stop worrying about whether china is picking up some of our money when we buy chinese machinery and look at other big problems with stimulus. stimulus under obama means we take money away from businesses making a profit and give it to ones that don't. we take money away from homeowners that pay the bill and give it to homeowners who don't. take money away from the productive part of society and giving it to crooks like the state of new jersey. >> david: is the stimulus working? >> david, china -- japan lost to china because of a bloating financial sector, housing bubble like crazy and crony capitalism between big companies and the government. sound familiar? yeah, a little bit. now, for this thing, you seem to be suggesting the solution would be just earmark jobs for america. we should have stimulus spending where companies don't have the freedom to spend it the way they want it, in the most productive way. that doesn't sound good to me. >> the famous democrat, f.d.r. had program they're marked jobs for america. why not do that? this stimulus package was erroneously structured against from the start. it was not a jobs program. it was basically a new entitlement program. americans are seeing right through it. it did not work. >> david: hold on a second. steve forbes, is it protectionist to demand that our tax money goes to u.s. companies in stimulus? >> david, there is a way to get around this and not have the government spend money in the first place and cut the taxes so that businesses and people and entrepreneurs can decide where the capital goes and we benefit from it. by the way, in japan, they used to have a relatively small government, vis-a-vis, the economy, in the '90s. went in the wrong direction. binge spending and binge taxing. why are we following their lead? >> i'm not sure liz is right with the boondoggles. it'd rather have productive sector of the economy spending money. >> david: isn't that the bottom line that a lot of money is badly spent, whether it's going to china or elsewhere? >> right. the obama administration has used it own version of crony capitalism to prop up unions, prop up the house market. that's prevented money going to productive sides of the economy. >> look at the reagan tax cuts were less expensive than the obama stimulus plan. i'm all for that. you're right, to the point of the works project but again it did help economy having the image of men and women, america going off to work to work at jobs. i think that was a plus. >> david: last word from emac. coming up next, what do jacuzzis for 50 people, 18-hole golf courses and five-story rock climbing walls have in common? wait until you hear this. all proof that america's biggest rippoff is college. the money you spend on your kids in college. we report, you decide. coming next. yellowbook has always been good for business. but these days you need more than the book. you need website develoent, 1-on-1 marketing advice, search-engine marketing, and direct mail. yellowbook's got all of that. yellowbook360's got a whole spectrum of tools. tools that are going to spark some real connections. visit yellowbook360.com and go beyond yellow. thanks. i got the idearom general mills big g cereals. they put a white check on the top of every box to let people know that their cereals have healthy whole grain, and they're the right choice... (announcer) general mills make getting whole grain an easy choice. just look for the white check. >> david: the biggest rippoff in america is? we'll tell you in 60 seconds. two hints. heavily subsidized and many say it's your ticket to wealth. what could it be? plus the three stocks th >> david: now for the forbes flip side. the big oste rippoff in america -- biggest rippoff in america is college tuition. it's soaring, even though the economy is falling. look at what universities are splurging on? five-story climbing wall or jumbo jacuzzi big enough for 50 of your closest friends. or $30,000 for each member of a golf team. school president raking in over $1.5 million salary. rich, most folks say the investment is still worth it, but not you, right? >> the investment had been worth it for 50 years. starting about right now, the investment for the majority of people who pay outrageous tuitions is going to be negative. the r.o.i. is negative. that's because the internet allows people to learn what they need to do and what they need to do to succeed on their own for free. >> david: do parents look at r.o.i., return on investment, for the money they put out? >> not particularly. we have a culture that believes students are like customers and they should be treated in this fantastic way. a couple weeks ago, i saw bill gates. he watches m.i.t. lectures on the internet and says a big battle coming up will be over accreditation. people can learn that stuff, but you can't prove it, you can't show it. you don't have the equality in the eyes of society. he went to stanford. if your kid got in, rich, you'd send him there, right? >> yes, i would. the accreditation -- >> there you go. >> he is right about that, but the internet will break down the credentialism in more and more fields. >> david: we'd all do as much for the kids as we could. that's the reason we're parents. but the costs and colleges have been going up way more than inflation. in the past year, tuition and fees have gone up 6.5%, when inflation is basically flat. >> david, i love looking through college catalogs. my favorite course is this one. video games as gender spaces. now listen, the people who are in the college racket will tell you that the college grads make $1 million over their lifetime more than the high school dropouts, that's true, but it's not because of the college. it's because people who do go to college have aptitude, persistence, the drive that gets them ahead. it wasn't that video game course that made them succeed and bill gates dropped out. >> stephane, to bill's point precisely. what has gone up the most is the cost of administrators. we've had 40% increase in administrators and bureaucrats in college, only 18% increase in teachers. so they are spending money on the wrong things. >> yeah. you know, but we were talking about hot tubs earlier. my view is if you don't like the hot tubs and you can't afford them, just don't stay in the dorms, don't spend that money. i think college is basically a good investment. i went to college. i got a degree in american literature. got a $10 haircut, cheap tie, bad suit, i have no pants on a make-up on right now. thank you, university of maine. >> david: are we better off sending the kids to college or not? are we getting a good return on investment? >> it depends where you send the kid and what the kid gets out of it. getting the degree shows the kid has brain, discipline, stick to ittiveness to get it done. they should stick to the man who saved millions of lives who got his graduate degree in physics and the like. but he took also political science courses and economics and tells college students before he died get that broad education, because you never know what you need to draw on when you go on in the real world. if the kid has a right mind, they will get good things from college. parents can look at the metrics and decide is it worth it or not? some will do it, some won't. >> david: i can't tell you how many teens have said well, big gates, he dropped out of college, and look what he did. >> bill gates went to harvard, bill gates' dad was a very connected lawyer. bill gates' mom was on an important board that got him a job. don't count on getting those breaks, guys. >> david: true. >> look, whoever is signing the check should look about taking the video games course. i do blame the parents on this one. they're not putting their foot down, right? >> david: good point. parental responsibility in all of the matters. thank you very much. when we come back, the stocks that won't rip you off, that will pay you off. that's next re is nothing more pd than hope. it is the promise that compels us to make the journey from wonder to discovery. the science of chemistry, our guide. the human element, our conscience. and to make this journey, we have become the new order of hunters and gatherers. finding answers in the elements. and a way forward illuminated by hope. . >> david: fox business. you got to tune in. we're back with the stocks that will pay you off. bill, all state? >> you're in good hands with this company. i think it will make $4 a share this year. in a good year when there is less road rage, it can make $8. >> david: it is at a 12-month low right now, vicky. >> at a low and it's trailed the dow for a couple of years now, so i just don't think what makes it get above that index and makes it worth a buy right now. >> david: you have semantic which is also trading low. >> intel bought rival to symantec mack afee and i think symantec is a likely takeover target because smart people in technology says security becomes part of larger companies. >> david: stephane, do you like it? >> anti-virus software, norton, that stuff is worse than the computer virus! i can't stand the product. i think there is a reason why the stock is cheap. >> david: you're going on to something everybody uses or knows, alcoa, aluminum. >> yeah. they are responsibly managed company. capable of earning a buck a share. we'll see it next year. only trading at 11 times that. >> david: bill, five seconds, do you like it? >>