for years kids have set up stands like this, but today, the police may busted you. >> i was really scared because i didn't know it was going to happen. we were selling lemonade out in our front yard and the third day they decided to shut us down. >> their mom heard the police yelling. >> i heard them yelling, girls you have to shut down the lemonade stand. >> it made me want to open my stand. will the police bust me? >> there are so many laws, everybody could be caught up in it. >> the avalanche of new laws, it makes criminals just about all of us. >> every citizen arguably could be shown to have violated some regulation in these stacks, that is the danger. >> police never told knees girls why they were shut down. >> we tried to find out but the city official, they said really they shut down our lemonade stand. >> we're not aware of who made the lemonade or what the lemonade with. you are still breaking the law and we can't let you do it. >> appleton, wisconsin shut down this stand and these kids were shut down, too. >> they said you need a permit. >> and hazelwood, illinois they settled on girl scout cookies from the front yard but the city said to stop. >> i said, what? cookies, come on. >> all has to people ran afoul of laws they didn't know existed and still don't understand. >> they are ununderstandable, not only to you but people like me, i am a lawyer and they are incomprehensible to me. >> even the police don't understand. she says the kids' lemonade stands violated the law. >> two officers, previous day bought lemonade from them and tipped them. >> in scottsdale arizona, one a person is accused of breaking the property maintenance crime, the crime -- the tree is the wrong kind in the backyard. >> you will be fined $2,000 a day. >> you bought the house partly because of this tree? >> yes. >> but it turned out this tree wasn't on the planning and development list of approved trees. there is a budget of them in the area. >> you point this out to the authorities. they say what? >> let us know who they are and we will fight them, as well. >> stephanie and chuck were fine had for holding bible studies. >> you need a conditional use permit. >> that is tricky, it goes down this road of studies. this could be tension of thousands of dollars. >> and how many people? >> code enforcer and the boss said more than three. >> you have more than three kids? >> i have five. >> famous people accused of breaking law can afford the lawyers or get them acquittal. >> but what you are an ordinary businessman, you import these guys, watch out you go could to jail for years. >> we didn't see the lobster. >> he used to import seafood then authorities is said you are in trouble. >> i did the same thing for 13 years. clear customs, bring the lobster tails in and sell them. nobody had a problem with that until date walked up on the dock don't off load. >> customs showed up and said put them back. >> we were wondering what happened. they didn't know the answer. >> you shouldn't murder and steal. that is old-fashioned. but the laws are much more technical. >> the government eventually said he broke four obscure regulations that or the books in honduras. >> said they had to be packaged in 40 pound boxes. >> everybody was using plastic bags. >> i started in 1986 and i have been doing it the same way. >> even honduras said it didn't matter. >> 7:30 in the morning. f.b.i., irs, six vans, customers about 13 of them on my deck, all with guns. >> that was just the beginning of his nightmare. >> you were sentenced to? >> eight years, would month. >> eight years and a month, maybe he was a repeat offender. >> any trouble before this? >> worst thing was a speeding ticket. >> he served six years in jail. >> what happened to your business? >> i went broke. >> what happened to the family? >> broke up. my kids are back home with their mother. that is the story. >> how do attorney generals they are not evil people. they want to make a name for themselves. they don't want to hurt people that didn't do nasty things wnruq are a lot of fanatics. >> prosecutors have noticed, other prosecutors like eliot spitzer, richard blumenthal, want impressive conviction records. >> all these regulations, they will comb the books and find something. >> this could happen to you. they can take any law they think you broke and take you to trial. whether you win or lose you are going to lose because by the time you are done fighting you are broke. >> the government never goes broke. >> they must spent million dollars. >> i heard they spent five million. >> how much money does it take? >> i've had clients that spent $10 million. >> i cannot even imagine how much money they spent prosecuting my husband. >> the feds tried jill's husband jack and lost. but instead apologizing for getting it wrong, they threaten to fine him $37,000 a day. a terrible crime did they commit. trying to build a house on their own property. >> the county gave you permission to build. >> and they inspected the foundation and approved it. >> so you started to build. >> but a government owned drainage ditch was clogged. they asked the government to the fix. >> it they say we are backed up six months. if you can go ahead and clean it go ahead and do it. >> we removed a huge logs out of this ditch. the water poured off the land and we were cited felony for cleaning the ditch. >> felony charge, it gave the property appearance of being a wet land. state government flood your property and federal government charges you with a felony for building on wet land. >> it's clearly not a wet land. she digging a well here. he wasn't finding water. >> he was down about eight feet but could not find the water table. >> a jury cleared jack of all charges. >> we won, but after we were home for a month, the army corps of engineers and epa sent us another letter saying how nicely you won in the criminal court. we still feel its wet land and the decision made by the jury did not matter to them. if you don't get off the property we're going to fine you. >> what does that mean? >> $37,500 a day. >> they've had to sell their home. now, they live in a trailer. >> this has almost taken everything you have? >> yeah, but i wouldn't live like that. >> and life savings? >> we'll be bankrupt. you have no idea what you are up against. you don't know the power. >> they ever all the time and resources in the had. it's foe with unlimited budget and they wear you down. >> they just come in and ruin lives. >> so our government is supposed to be by the people, for the people, sometimes is against the people. >> up next, why i had to do this. >> wait, stop. i can't give it to you, don't drink it i find the omega choices overwhelming. then i found new pronutrients omega-3. it's from centrum. it's a smaller minigel. with two of the best omegas to support my heart, brain and eyes. new pronutrients from centrum. lord of the carry-on. sovereign of the security line. you never take an upgrade for granted. and you rent from national. because only national lets you choose any car in the aisle. and go. you can en take a full-size or above. and still pay th mid-size price. i deserve this. 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[ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country. ♪ >> john: the fact that american police tell little kids they don't have the proper permits to do this, made me wonder, what does it take to open a lemonade stand legally in america. >> they directed me to this website. >> this is supposed to make life simple. >> they make it easy, except, what? >> there was unintelligible questions. >> what is an assistant. >> an employee identification number. >> the government said i needed to take a 15 hour protection class to sell lemonade. >> i don't have a bicycle. >> and then an exam and wait weeks to find out if i passed. then i would buy a government approved fire extinguisher. it could take months, forget it. so i did it without a permit. max's lawyer gave me the okay. i didn't sell anything. i had to give every refunds. first, the customers thought it was crazy. many once had their own lemonade stands. >> did you have to get a license? >> i'm in canada and i can't let you drink this. >> there are so many rules, i'm not allowed to sell this to you. >> i didn't have time to get all the permits. >> you didn't need any permit. >> that is how was once in the united states. >> back in the 1920s and you take a poor italian and he going out and buys a used car and paints the word taxi and he is in business. >> john: this old documentary he got his start driving a cab. >> i made about $125 a week. >> today he couldn't buy a cab unless he was millionaire. >> most cities to buy one of these medallions. no medallions, you are not legal. but they now cost million dollars. >> very expensive. >> so expensive that only big companies can afford them. so these drivers are not entrepreneurs, they are employees. >> it's because of the medallion. >> the purpose of these licenses is to keep outsiders out the purpose of a license so they can charge higher prices. >> john: one of the few remaining places you can start a taxi business is washington, d.c. >> it's the last bastion of free entrepreneurs in america. >> john: this lobbyist wants to end that freedom. >> you have to regulate. >> john: he wants to bring the medallion rules to the washington, d.c. he wants to cut the taxi cars in half. >> there is too many taxicabs. >> they don't think so. >> they like be allowed to work but the lobbyists convinced the d.c. councilman to sponsor his bill. >> we want to professionalize our taxicab system? >> we wanted want to make sure the customer has a good riding experience. >> john: that sounds good but regulations are in the books subject to every driver to petty harassment. still at least in washington, d.c., open entry rules allow them to enter the business. >> washington, d.c. is the only major city in america that allows open entry. isn't that good for poor people? >> no, it's not. a medal yon system is what is needed. >> john: that squeezes newcomers out? >> and they should be squeezed out. >> john: why? >> because this is a regulated industry. >> john: how much do you get paid lobby for this. >> my right is $775 an hour. >> i can't blame him, but don't husband 80 me. >> john: so you are paid by the taxi king, jerry schaffer. >> i'm being paid not him. >> john: keep the little guys out. >> kings, queens and jacks. >> poor folks pay lobbyists. if he gets his regulation, poor people won't be taxi entrepreneurs. >> only a few will be able to afford it. >> john: washington has been an open place for taxi to become a taxi driver so why monkey with it. >> folks have different legislation, our charge is to implement it. >> john: how many laws have you gotten past? >> very active. >> john: ever repeal any. >> no, we haven't appealed any. >> john: it makes it much harder to be an entrepreneur. ♪ 6. >> john: put aside what you eat. it turns out, no. some towns ban meals. one banned all fast food restaurants. they want to limit the salt i eat. if you sell certain things at the food police disapprove of, you better watch out. >> there was lookout banging on the back gate. >> john: not long ago, federal and state officials raided a food co-opt in los angeles. >> were you drawing guns. >> they searched me. they thought we had cocaine in the fruit. >> their crime was selling milk that hadn't been pasture turized >> they also raided sharon's farm which supplies rawsome with the natural food. >> these people come and rip my house apart. they took me down to the county jail, booked me. like i was a criminal. >> they were charged with six felonies. they could go to jail all because health officials say raw milk can be down right dangerous. >> john: it can. unpasture used means it's not heated and could have salmonella but raw food buyers say this. >> it's pure and healthy and makes me feel good. >> john: that is ridiculous. but don't people have a right to be ridiculous. >> this is america. how are you going to tell me what i should and shouldn't eat. i eat lots of dove bars and i also eat chicken. they say it causes lots of illness and many deaths. we don't ban chicken. >> when the government gets between my lips and throat, that is an invasion. >> why do you want to drink raw milk? >> i think it's good for me. >> john: most states ban the sairls sale of raw milk just like unlicensed lemonade stands. my lawyer told me if no one drinks it and i don't make any money, that is probably legal. >> it indicates the prejudice against terrible business people. anyone who is this s is in business is a cheater. >> john: cdc says hundreds have gotten sick from raw milk? >> more have drowned in backyard swimming pools. ultimately you and i should be able to choose our risk. i think eating mountain dew is risky but i'm not asking for a government telling you can't do it. >> they have koult elevated 500 acres and more and more rules. >> every day, i look over my shoulder, what are they going to find illegal. >> john:. >> you can go into the woods and put a deer prominently and take it around in the afternoon sun and take it home and string and feed to it your children. that is being a great american. >> but if i take one lamb or one pig and get all the neighbors together and we have a community kill them and one neighbor pays me a criminal i'm a criminal. >> john: we need government to protect us? >> if that is what you think, go ask for government protection but allow my customers and me who don't have faith in the government, let us opt out. it's freedom of choice should be important as the freedom to worship and speak and own a gun. >> john: what about the freedom public officials doing public work? coming up, in america these days you never know what is legal. can police legally arrest you just for filming the authorities? that that is next. what makes the sleep number store different? you walk into a conventional mattress store, it's really not about you. they say, "well, if you want a firm bed you can lie onne of those." we provide the exact individualization that your body needs. wow! that feels really good. it's about support where you find it most comfortable. hurry to the final days of the ultimate sleep number event, where queen mattresses now start at just $599. and save 50% on the final closeout of our innovative limited edition bed. only at the sleep number store. "wall street journal" reporting that pentagon is beefing up sea and land based defends in the persian gulf to counter attempts by iran to close the strait of hormuz. nearly 20% of the world's traded oil passes through the strait. >> opening arguments beginning in the trial of a former rutgers university student accused of using a web cam to spy on his gay roommate. 19-year-old's attorney says his client may be young and stupid but he is not a criminal. he committed suicide in 2010 days after he was recorded being intimate with another man. he faces 15 charges. now back to john stossel's illegal everything. our government adds thousands of new laws ever year. the feds added 80,000 pages of laws. and state and local laws we're drowning in rules. >> this could lead to the police locking me up. given the police have the power to lock me up, or shoot me, it's important that we be able to keep an eye on them. >> fortunately that is easier today even our phones have cameras and camera is a powerful tool, watching the watcher. >> you are going away. >> the problem is that often the watchmen don't want to be watched. >> a highway patrol told pete stop your rv. pete is an activist to that likes to videotape encounters with authorities. >> turn that camera off, please. >> how come? >> turn it off for me. >> he had broken no traffic laws but he was suspicion of his big trailer with new hampshire plates. he filmed the encounter. i would like to keep everybody accountable and the police officer didn't like that. another arrived and said -- >> i'm not turning it off. >> you are going to jail. >> the cops grabbed his camera and arrested him and his friend. >> they held us in jail. >> after 12 hours the police let them go. >> they charged me with possession of a beer because there was one opened beer. they nothing else to stick on me. >> they couldn't charge him with filming the police because that is legal. just outside my office a cop claimed a bicyclist rolled in to him on purpose and the video showed up and showed the officer was the aggressor. that cop was eventually fired. maybe video like this is why some don't want to be filmed. >> i'm recording what you are doing. >> this is my yard. >> in rochester new york, when he heard a driver stopping outside of the house. she went out to film the encounter. one officer didn't like that. >> i'm allowed to stand in my yard. >> i was in cotton pajamas. i don't think there is any faith. >> all i have camera and i'm wearing nothing. >> it does not matter. >> you are going to jail. >> i don't. >> understand the officers took her to jail and charged her obstructing governmentalings. >> did i nothing. >> i think the young police officer is high on his power. >> high on his power is a little harsh. he is doing his job. >> no, it's not his job to take people from their own property and put them in jail. >> john: a month later, emily put the video online. it was viewed thousands of times some viewers criticized the police. >> john: you post it on youtube and they come back. >> in uniform, four officers. >> police showed up outside a meeting and started writing tickets for parking violations, like parking 12 inches away from the curb. >> her friend taped that. >> it's 12 inches from the curb. >> the media picked up on the story, police chief said officers' actions were inappropriate. charges were dropped but no officer was ever punished. they never are. even when they arrest news men. just ask. tried to film a police pursuit. >> because it's an act of seeing and you are leaving. go away. >> john: he went away. he moved across the street. then the officer drove up to him there. >> put it down. put it down. >> john: they charged phil with obstructing government. >> did you obstruct the government. >> absolutely not. i was probably 1,000 feet away from the officers. >> charges were dropped, the officer was never punished. none of the officers would talk to us. head of one police union, sent us a comment. >> some is a serious safety issue. i am afraid terrible something will happen. >> opposite is true,. >> john: this hijacker rammed a cop car. the officers shot limb and exonerated from murder because he acted in self-defense. some officers understand it's just part of a job to be filmed. >> so let's give three cheers for the officer from oceanside, california. it's refreshing to hear an officer. my badge number 1093, god bless america. >> john: coming up. should they have the freedom to sell sex? should they have the freedom to get thigh? legal drugs and sex work when we return. (crickets chirping) you might just wanna trade that one in. ♪music announcer: during the bass pro shops spring fishing classic save up to an extra $100 on a new reel when you trade one in. like an extra $20 dollars off this carbon lite baitcaster. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. >> john: lots of people in jails are here for drug use. people that make the law, many admit they use drugs. >> which are you ready to admit using marijuana in the past? >> the audience applause. >> i didn't inhale. >> i inhaled frequently. that was the point. >> everyone laughed. but the same politicians oversee a system that does this. >> drug raids happen in america more than a hundred times every day. neil once led the raids. >> you have locked up hundreds of people for drugs? >> absolutely. >> john: you feel good about it? >> we really thought these drugs made people evil. >> john: but ten years ago, he decided drugs do less harm to americans than the drug war? >> drugs are and can be problematic but the policies we have in place to prohibit their use are ten times more problematic. >> john: drug raids as changed. s.w.a.t. team broke into this family's house. shot their dog. once inside they didn't find any drugs. the owner was charged with possessing drug paraphernalia. >> we just end up with dogs being shot but kids being shot. we end up with search warrants being served on the wrong home. innocent people on the other side of the door thinking they are protecting their home. >> we should be kicking down more doors. >> paul was a white house drug czar. >> they are not kicking the door koor if somebody is smoking marijuana but they are kicking the door for a violent person. >> sometimes they terrorize people? >> because the accident happened should not be a reason to do away with the program. >> it didn't stop drug use but it created violence. >> tens of thousands of people are dying. >> john: because they get high on drugs about but because something is illegal it's sold on the black market. drug dealers can't call the cops if someone tries to steal their supply so they arm theirselves to the teeth. >> people get hurt. >> john: especially kids. drug gangs look for new recruits >> they recruit better than fortune 500 companies. >> he demonstrate how they recruit kids. >> look what i got? wouldn't you like a pair of these. come back and show me again. >> they come back and you are looking good, man. wouldn't you be able to buy a pair of them every week. this is what you could be. >> john: few days later the dealer sees the kid again. >> you owe me when you offered me sneakers, you got my $120, oh you don't. here you hold for me. that is all you have to do. you get to keep the sneakers, i got you. if drugs were legal people would assume there would be more than that. >> it is the policy of prohibition that causes the environment. we don't have the kids on corner fifth of jack dan will itself. >> sewed by businesses and safe businesses, there is no violence here because this is legal but there used to be violence in places like this. violent crime is why america ended 90 years of alcohol prohibition. >> we created organized crime. it organized well before prohibition. >> john: here is the murder rate about 80 years ago, it rose when alcohol was banned and dropped when it was legal again. >> if we want to do away with drug laws and say let adults do what they do, we know statistically the drug usage numbers are going to skyrocket. >> john: but we don't know that. they would think drug abuse would be rampant. portugal did he criminalized all drugs and the number of abusers did not skyrocket. >> people talk about portugal as a success, it's actually a blatant failure. >> john: we went to portugal. he is just wrong. this man is portugal's drug czar 15 years ago, hair win users shot up on the streets and instead of doing what we've done they tried something different. they decriminalized every drug. crack, heroin, you name it. >> it's legalization. we have most drug use in the world. >> it's treated like a parking ticket. people caught with drugs this man found with hash get a slap on the wrist. when the law passed. stoned people ran wild in the streets taking heroin and crack? this woman served in the parliament. >> they take more responsible attitude toward drugs. >> john: despite the freedom. independent studies found that the number of people that regularly do drugs stayed about the same. more importantly.... >> numbers of addiction decreased a lot. >> this woman was openly smoking a joint near police officers. but we saw more public drinking than drug use. drug abuse is down say authorities and drug crime is down. >> at first this police inspector had doubts about the law but they say it works. >> and teen drug use is down. >> it brought peace to the debate. >> john: but in america the drug war rages on. >> coming up, another war against prostitution. >> we don't sell access to the intimate self. it creates the idea that human beings are no better than this. >> but the sex workers is saying what is he is talking about? >> i choose to do this. gives up to eight hours of fever relief. allowing your little one to get back to building a better afternoon. children's advil. relief you can trust. to get back to building a better afternoon. actually, head & shoulders is for more than dandruff. it gives me a healthy scalp and great looking hair. does it do anything else for you? 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[ male announcer ] head & shoulders. 7 benefits. 1 bottle. ♪ ♪ ♪ [ male announcer ] not everything powerful has to guzzle fuel. the 2012 e-class bluetec from mercedes-benz. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. >> john: in these piles of laws, one law that most agree on. the ban on prostitution. sex is okay, money is okay, but sex for money, that is forbidden >> seven women arrested and charged with soliciting prostitution. >> women hide their faces. >> tv reporters treat prostitution like most other crimes. >> we have exclusive pictures as vice cops sent set up a sting. cops posing as johns ealtdz lured five women to the hotel. >> john: even using the yellow pages. think about that. it wasn't difficult for the police to discover the lawbreakers. the yellow pages in my town has 15 pages of so-called escort services. police ignore 90% of it. when they do make busts the implication the police saved the prostitute. >> jail may be the safety place they have ever been. >> john: jail is the safest place? i doubt that. >> more importantly, where sex work is legal there is little danger. here in nevada, for example. brooke says sex work is like any other sales job. >> we are entrepreneurs and independent contractors just like any other business. >> she works at the bunny ranch, one of 28 legal brothels in america. >> john: you are pimp. you are exploiting? >> i have a license to do this. 500 women rent out his brothels. >> to be bought and sold. >> wait a second. don't you feel demeaned? >> not at all. >> the u.s. state department says selling sex for money inherently demeaning. >> sex is supposed to spontaneous. >> who made the sex laws. >> you do it for money. >> if you model for money. >> sex is more intimate. >> you are still showing your body. you are exploiting yourself. >> i choose to do this. this is what i want to do. >> i assume you had no other options. >> i had several options. before i can this i had a nice paying job. >> these girls can go out dates and give up sex and it's fine. but if guy leaves a hundred dollar bill on the dresser, is something wrong with that? >> it's not that complicated to appreciate why we don't want to legalize proog is. >> i put to it former prosecutor? >> we don't sell access to the intimate self. it creates the idea that human beings are no better than slavery. slavery is against the constitution. we find it. >> john: but that is involuntarily, that is forced. >> prostitution is very close to slavery. it's inconsistent with what freedom means to subject humans to market forces. >> john: you lost me there. humans are subjected to market forces all the time. ever see a fashion show? a professional sports draft or a boxing match. >> two people could beat each other up in boxing ring, why can't the girls have sex for money. >> sex is just a job, some better some others. >> a girl at mcdonald's doesn't love make goburgers. >> candy dropped out of a college because she wanted to do sex work. >> if i don't like somebody, i don't have to be with them. >> nevada has it right, not all of nevada. in las vegas, it's illegal. >> they have lots of diseases, two million property thefts last year. prohibition does not work. if you want disease and you want money going to criminals, keep it illegal. by keeping this illegal you kill people. people don't get aids tests. they are afraid to report crimes to the police. in nevada, in parts where it's legal, there is no crime. >> oh, please. you can't. >> they do engage it's under ground. >> so people rob banks, too. we can't regulate. >> stealing money from people. this is consensual, there is a difference. >> people will want to do things that are harmful to them. >> john: i wish you could talk to the women from the bunny ranch. >> i would be like, i could save you. >> john: the sex workers listened to her comments. >> and they joined the conversation. >> they work in a legal place. they say it's great. >> we like it. if it's your own choice. >> i am happy that you are happy. but the fact that you are having a good time is not an excuse to ignore the harm. tell me why? >> it isn't about you. >> but nothing but happy. i believe the majority of prostitute women suffer. i i compromise your freedom. >> so you want to tell everybody in the world what they can do with their own bodies. >> john: senate majority leader agrees. >> the time coming to outlaw prostitution. >> because it's sex. >> relax, just sex. >> even if you support the laws against sex workers, do we need all these laws? so many that no one understands them? so many that the government admits it can't count them all. no, let's get rid of some of these laws. that is our show for tonight. good night. ♪ [ male announcer ] offering four distinct driving modes and lexus dynamic handling, the next generation of lexus will not be contained. the all-new 2013 lexus gs. there's no going back. see your lexus dealer. there's no going back. online dating services can get kind of expensive. so to save-money, i found a new way to get my profile out there. check me out. everybody says i've got a friendly disposition and they love my spinach dip. 5 foot ten. still doing a little exploring... on it. my sign is sagittarius, i'm into spanish cheese, my hairline is receding but i'm getting a weave. 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