poverty? that's our show tonight. >> and now, john stossel. >> in this rich country lots of people are poor. so what should we do about that? spread the wealth, that's the democrat's plan. some americans are plenty rich. we can just tax more and spend the money on the poor. fifty years ago president johnson said america will end poverty by doing that. >> this administration today here and now declares unconditional war on poverty in america. [applauding] >> he expanded social security to include more people. expanded the food stamp program. created the job core and more. and look how it's reduced poverty. in the first sten years of the war on poverty, the poverty rate dropped from 17 percent to 12 percent. that's great success. but wait a second. look at the years right before the war on poverty began. americans were already lifting themselves out of poverty without the welfare programs. and now, look at this graph that shows what's happened since the war began, after five, ten years of improvement, americans stopped making progress. the poverty rate has gone up and down. what happened? earlier i asked congressman paul ryan what happened. >> we basically decided to measure poverty based on inputs. how much money are we spending? how many people are we putting on these programs? we're basically managing poverty. and as a result we're perpetuating poverty. and so many of these programs end up disinsent viesing work. they say it pays not to go to work. you'll lose more in benefits than you will in wage. >> encouraging people to be dependent. >> it's a realistic assumption which if you lose more in benefits by taking the risk of going to work and not seeing kids, having a babysitter, the rational person says it doesn't work. stossel: congressman ryan came out with a new book it expands on the antipoverty thing he released months ago. what's your way forward? >> getting to work. you're implying republicans cut them off and then they'll go to work. we have programs that are going unreformed. so what we're saying is stop this bureaucracy one-size-fits-all alphabet soup of agencies trying to dictate this. bring resources back to communities and focus on the individuals -- stossel: states. >> give states more states' rights, but most importantly focus it on getting individuals from welfare to work and do what you need to do to help deal with the individual problems so they can get from welfare to work. stossel: impose work or job requirements. how do you do that? >> maybe this guy needs drug countlessing. maybe she needs day care. stossel: and the state bureaucracy will figure this out. >> break up the bureaucracy and allow them to compete whether they not have a model from welfare to work. give families in need a choice of providers. stossel: two other points, regulator reforms. >> there are two forms. you have big business and established interest that will to come government that will protect them and a barrier to entry against competitors. stossel: licensing rules we can't just let them operate here. >> we should get rid of of that so we have a free economy and so that we don't have crony capitalism. as republicans, we need to be a pro market party not just a pro business party. stossel: tier these rules down. >> tear them down. a lot of these russians hurt the poor. they take more disposable income from people. stossel: he's taken the heat for his plans. here's jim from washington state. >> paul ryan is sitting up there smiling, but his budget cuts 100 and $37 billion out of the food stamp program. they want to see like they care, but if you look at their deeds they clearly don't care about the poor. >> we spend trillions of dollars and we haven't moved the needle. >> if you cut food stamps they'll starve. >> i beg to differ. the obama administration removed the work requirement for the able-bodied what we're proposing and what jim is criticizing is work requirements. reinstating the notion if you're an able-bodied person and you're receiving government assistance, taxpayers expect something in return. and we should. such as work related activities. everybody has a different problem and that's why we're saying the federal government is sitting in washington thinking it knows how to get people out of poverty is arrogant. it doesn't work. what we want to do is empower -- stossel: states may be incompetent. break up the monopolies and have a competition so we can experiment ideas to focus how do you get people out of welfare, out of poverty into work. democrats say this is government's responsibility and the best way we can do it is raise the minimum wage. this makes sense to people. i understand that -- how it can make intuitive sense. it will cost as many as a half a million to a million jobs. >> it will raise the price of labor and business will shrink the availability of jobs. when i waited on tables, i made minimum wage and it was a fantastic opportunity to learn good skills in life that made me better. by raising the minimum wage wub end up shrinking the pool of jobs that people need to get in the game in the first place. >> i was upset to see one of my favorite actresses pro moamght a higher wage. >> i'm afraid i'm leaving for good this time children. i'm only paid the federal minimum wage. see. >> but you have magical powers. >> you think that would entitle me to more than 7.25 an hour. >> that's not the version i remember. stossel: but this convinces people. it seems cruel and people say a business isn't going to hire people for an extra buck or two. >> the point here is not to shrink the pool of available jobs that people can get in the available work force and make a better life for themselves. we want more jobs not less of them. snovment the government's programs stwringd the number of jobs. >> whether it's taxes or regulations. when you see tens of millions of people in america not having access to community and we want the government to do more damage to our economy, to make it harder for people to get jobs. snovment the government is popularity be and it does a lot of things well. we as conservatives want to keep government limited so what it's supposed to do it does well. instead of spreading it too thin. >> thank you congressman ryan. >> now, let's frmple opposition. earlier we saw jim mcder the month saying he doesn't care about the poor. representative mcder the month. congressman, don't both parties care about poor people, but disagree about the best way to help people. >> well, paul ryan is trying very hard to be a compassionate conservative. they talk a very good game, but it's by their deeds you shall know them is what the bible says. the fact is the budget he put out cuts things all over the place that -- we're not investing in our kids. we're not investing in nasa, we're not investing anywhere. >> all right. i assume you want to raise the minimum wage? >> of course, this whole business about somehow raising the minimum wage causes a loss of jobs. well, if that's true, why don't we drop the minimum wage altogether and work for people work for a dollar a day. >> if they're willing to and that's the agreement of their employer. wouldn't that create a lot of new jobs. maybe somebody will be pumping your gas at the gas station. learning how to work. >> putting people to work that sounds like a good idea, but if they're at work and they can't pay their bills and they can't see their kids. you got people with two and three jobs together trying to make it. >> why not 40 bucks an hour if there's no harm. it doesn't take jobs away. >> you can get crazy like that. that doesn't make any sense. what makes sense is to gradual bring it up like we have that was once a dollar an hour. now it's up to 7.25. now, we're saying bring it up to 10.10. that would be a good start. >> hollywood agrees with you. actress kristen bell said a spoonful of minimum wage will make -- >> just a 3-dollar increase can make a living wage. it makes a living wage. it makes a living wage. just a 3-dollar increase, can make a living wage. >> it's so sweet and reasonable so the reason tv's remy was willing to dress up as a chimney sweep. >> so they'll raise the prices how happy i will be, it's great. i've been replaced by a machine. congressman, that happens, cashiers get replaced by self-scanners at the checkout counter, so on. >> we see the changes in the job market. but if you're not paying people a wage that they can afford to put a roof over their head and pay for their food and pay for a their transportion to get to work and have any chance to help their kids go to college and pay their medical bills, it's a crime that anybody in this country as rich as us should have to have a bankruptcy and a medical illness. it's just unforgivable. >> i fear most americans believe with you. i talk to people in times square. at least some people said government teaches helples. >> giving everybody is creating a society where it's just expensive. >> people need things. >> it's okay to help, but do we need to give them free cell phones. >> i think anything you subsy dies you'll have more of. >> and that's what's happened with the war on poverty (?) >> we have this church showing what's happened since it began. i don't know if you can see it there, but progress was great for five, seven years. and it stopped because we taught americans to be dependent. your programs do that. >> we have shifted the cost onto people and made them more and more in debt. their houses, their future are gone because they have financed their kids education. >> so everything should be free? college education, health care? you just want to spend other people's money. >> europe. >> we can't afford it. >> what do you mean we can't afford? >> we're trillions in debt. >> the french. >> the french are going down the tubes. but their kids are being educated and they're competing with us in the international markets other countries understand investment. this country understands only the bottom line of the very rich, and they are doing fabulously. >> thank you congressman mcder the month for joining us. i hope you never get to spend all of our money at least as much as you want to. >> i hope i get to spend some of it. >> audience to join this argument. you can tweet using the hashtag poverty or post on my facebook page. we want to know what you think. coming up, some believe the best antipoverty program is a government policy that gives people thousands of dollars a year. is that smart? that's next john: you want 30,000 bucks, switzerland may give its citizens that every year. here's coverage for the promotion of the ballot measure. >> the proposed basic initiative arrived with a splash, and the promise of 2,000 euro a month for every swiss citizen intended to let them leave without basic financial worry. john: live without financial worry what a great idea says the editor of reason.com. no, it's a terrible idea says the economist. so elizabeth, you got to convince me. why is this a good idea. people will just waste the government and the government will say we have to say more. >> there are all different versions even milton friedman proposed something like this. it's not an anti-libertarian book. john: a plan to replace welfare state gives everyone 10,000 bucks. >> the welfare system we have now is so huge. it has all these different application requirements. all these agencies that are manager it. kind of just wipe all of that out and combine everything into one system that would be more efficient. >> ed, the way to get through poverty is not through handouts. the market. historically places like hong kong, singapore, united states -- john: we all agree on that and i'll go into it later in the program. what about the really helpless people? give them money. >> we should think about the best way of helping people. number one is markets. i think we have a positive obligation to help people in need, but government is not the answer. private associations that would do that, friendly societies, mutual aid societies, thinks like knights of columbus. john: they weren't that friendly. they were kind of racist in that they would help people of their own kind, but they were smarter, you don't need a hand out sometimes you need a kick in the rear. they were better -- >> they did focus on building character. helping people on their feet rather than giving free cash handouts to people that said, hey, this is potentially going to encourage you not to work. how can we help you back on your feet? john: these groups would come back after we stop the handouts. >> the more the government takes out of our pockets, the -- that's the tragedy of american compassion. john: but people don't agree -- i agree it would be private money to do it. elizabeth, really, you got the cocaine addict. he gets ten thousands bucks it goes right up his nose. he got kids. the politicians will say we can't let his kids starve. >> that happens now. you have child welfare come. it's not like we need to create a new entitlement program for someone negotiating their kids. you have to spend your benefits on food or rent or whatever. and the government chooses how you get to spend that assistance. what if you grow your own food what if you inherited a house, but you need that on money for car payments to commute to a job to take a class to improve your situation. john: this is more flexible. >> i lived in san francisco and they gave cash handouts to homeless people at the beginning of each month and unfortunately a lot of them did elicit substances with those things. it didn't help people. >> i don't think the homeless population is something you can extrapolate to american citizens as a whole. >> by paying people, whether or not they're working, you're giving them that extra option of not investing their future being dependent on the government. >> this gets rid of the disincentives. you might lose all your benefits and you have less than before because you're paying for commuting to work. you're paying for child care. >> the tax incomes was supposed to get around it. one study found in indiana they gave money in the hours of work reduced count down. >> they did, but it was a very modest reduction. the biggest reduction was in single mothers for them it was about 130 hours total which would equal about three working weeks. and they found they weren't using this to sort of layer out approximate the people taking extra time were spending more time looking for a better job. or spending time with a newborn. for young people, they were going to school. they weren't like i'm taking this and never improve again. they were improving their situations. john: coming up to help poor people, americans give millions in foreign aid. >> the problem is touchdowns work. everybody knows it. >> it's failed everywhere it's been tried. >> there comes a time when we he'd a certain call. when the world must come together as one. john: there are 1,000 charities raising to help the poor. >> they give us food. they bring us shoes. they dig us we will see wells. >> give now and lives will be saved. john: so americans give. give about $5 billion a week hoping to help poor people. >> the problem is touchdowns work. everybody knows it. >> it's failed everywhere it's been tried. >> everybody talks about it. >> the old way we did development is no match for partnership. >> yet the icons of charity remain the same. >> icons of charity are the ngos the nongovernmental organizations that profess to help poor people. plus governments like ours, americans spend billions of dollars of foreign aid, but it doesn't work all that charity money doesn't help. that's the claim of a new movie called poverty, inc. this fall. michael made the film. charity money, 5 billion a week doesn't help the poor people. >> obviously there are times when foreign aid may help. there can be be good aid and bad aid. john: say after a hurricane, short-term help. >> right. i think the biggest problem we've used the emergency as a model. you have an earthquake, three years later people are still giving away rice and different things. oftentimes, our help ends up crowding out local business. john: we help people stay poor. >> we turn them into the object of our -- john: it was one of the the poorest countries of the world and after the earthquake in 2010 they got $50 billion in aid. after they got 50 billion, they were even poorer. why? because aid encouraged people to be helpless. >> there are more ngos per capita here than in the world. they're trying to find ways for them to keep giving away free stuff. as if they didn't want the haitians to stand up for themselves. >> american also encouraged helplessness by subsidying rice farmers. america then indicatorrably gives it to poor haitians, but before all this haiti was self-sufficient in rice. >> when they started flooding the haitian market with subsidized rise, rice became a cheaper commodity. we are now consuming rice three times a day seven days a week. >> because it's practically free. >> because farmers could not make a living outside area, they moved in looking for better days, and we overbuilt slums. and what is this? it actually created more poverty. john: and haiti stays poor despite all this aid. >> one of the stories we tell is about a company called anursa that makes solar panels. before the earthquake they were selling about 50 solar panels a month after the earthquake there was a huge demand, but organizations in the united states and solar panels began to ship solar panels down there for free. one of their founders told me, we went from selling 50 a month to five in six months. so our desire to help actually delayed the development of local business to help the poor. john: the answer can't be to just do nothing if people are horribly poor. we're rich. people want to do something. >> it's not enough to do something. we're not called to just have a heart for the poor. we're supposed to have a mind for the poor. when our doing things make the situation worse, then we have to stop. >> a sliver of good in his movie is that finally some leaders of developed countries recognize that aid can hurt. here's the president of rwanda. >> aid leads to more aid and more aid and more aid and less independence of people receiving aid. >> and we heard president clinton say this isn't working. and even obama said aid isn't as good as capitalism. >> what you're seeing hopefully is that people are starting to recognize that the current way of thinking is broken. let's rethink our assumptions and our beliefs about how we think about poor people and how we think about economics. john: thank you michael. we're out of time. coming up child labor. >> early in the morning, children board a school bus, but they're not headed to school they're going to work. john: going to work in north carolina. and my guest guests says good, let children work. debate about that next. >> oh, no that boy's hands are bleeding. child labor is evil. this is a video game made for a so-called educational tv channel. and what education do people get? some obvious truths sweatshops are cruel. workers are overworked in dangerous conditions. american companies ignore the abuses because they make money and that means child workers are victims of our whims. this is what many americans believe and many are taught. therefore the answer, close the sweatshops down. ban them in america and demand that other countries ban child labor. just a basic human rights issue. who would argue with that. ben powell for one. he wrote a book we ought to let children work. that sounds awful. >> child labor might be awful, but prohibiting it is an awful lot worse. listen, we don't make people better off when we take away their least bad option. children only work in these because their family is desperately poor. if you ban sweatshops you don't get rid of that poverty, you eliminate that one option they have that makes it not quite as bad as it would be otherwise. >> so no laws against it. >> when we were developing we had virtually no laws against it. and the process of development took care of it itself. we didn't have a national labor law until 1938. it followed the economic development. this completely makes sense. labor hood agitated -- once the process of competition raised standards including no more child labor then businesses didn't lobby against it and governments adopted laws. >> here's an example of how the western media covers the child labor outrage. >> it is 800 degrees celsius. look at this small boy. and who is at fault? big corporations and free trade. >> we think more free trade and more sort of opening up of markets for -- the big us corporations are hurting people all over the world what world are people looking at john. >> recently 500 million people have escaped poverty in china. this is the greatest rukdz in poverty in human history it's going all around us and it's this process of trade and development that's doing it. >> it's the same globalization that they hate has lifted people up. >> if i give you a list of sweatshops, that list would be hong kong, taiwan, south korea all in the generations took us 100 years in the united states is grow from preindustrial to something looks like post sweatshop standard of living. an advocacy health watch said there's plenty of child abuse in america they made a video about it. >> early in the morning, children board a school bus. they're going to work. they're among the thousands of kids that work on tobacco farms in the united states each year. samuel is nine years old. he goes along with his family to the fields and usually sells sodas to workers. >> there's nobody to babysit me while my mom, my brother, my sister are working. >> joe wrote the report. how many samuels are in american fields. >> in the united states there are hundreds of thousands of children who are working for hire in agriculture. john: and it's legal in agriculture in america. >> it is we have a double standard in us child labor laws. you have to be 14 years old to work at burger king and mcdonald's and can only work limited hours in a day, but if you're 12 you can work 50 or 60 hours a week in the fields and it's perfectly legal. >> and your organization objects to that, but you heard what ben said, why would a law make it better. is it terrible that this 9-year-old is spending time with his family. >> samuel is working in tobacco. he's out there in 90, hundred degree heat. many of the children starting around 11 and 12 are working ten hours a day. >> i don't believe samuel's parents dislike him. i think they need his income to work. prohibiting sam doesn't change that fact. >> their anchts are worse. >> most children who are working they're helping out their family. they see that their parents are struggling. >> take the worst case, children working in the factory in bangladesh. senator introduced the child labor act which would ban importers from countries like that. in response bangladesh fired about 50,000 children. a leftist human rights group investigated and found many went into prostitution. this doesn't help them. >> so laws are important, but on their own, you're right, they're not going to solve the problem. >> but we shouldn't -- the main decrease of the -- people escaping poverty that decreases child labor that's what globalization and economic freedom is about. >> let's look at the u.s. there aren't hundreds of thousands of children working in us factories at age 12. there are hundreds of thousands of children working in the fields. the reason why is because it's legal. when it's allowed under the law, parents are much more likely to put their kids in hazards conditions. >> this economic growth that comes through our economic freedoms that's what's -- >> economic development is going to lead to a reduction in child labor. you look at any poor country, not all the children are working. poverty and child labor are not synonymous. there are ways to support children in poor countries without them going to work. >> thank you joe, ben powell. we'll find better ways to spread the wealth, i think, when we return. you're driving along, having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second... boom! 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for thousands of years with people -- i assume the midwives customers knew she wasn't a doctor. they chose her anyway. isn't it their rate to pay whoever they want. no, not in america. claudia is a lawyer that helps entrepreneurs fight stupid rules. and i know you're not defending that midwife. but in much of america she's not free to do what she's doing. >> that's right in 28 states in d.c. you have to be licensed in order to be a midwife. in most states you don't have to be licensed. it's a century's old -- john: there's no evidence that women are being badly treed in those other states. >> it's just as safe as giving birth in the ahospital. >> in florida, to be licensed it costs more than $1,000. >> the state that license midwives require two years of education that's two years where women aren't in the workforce and two years they're having to spend money and time in education instead of working and helping pregnant mothers. john: let's move on to street performers in some parts in america. bureaucrats nowstreet musicians. >> it will separate the pros from the mutuals. >> how does it? think about this. street performers are artists. they don't usually have a lot of money. (?) you're basically not going to separate talent. ones whowk afford it from ones who can't. >> in st. louis they had to audition for the bureaucrats and pay a 100-dollar fee. >> and six people were rejected after auditioning after an official. >> it's a solution without a problem. this is not a problem that we're hearing anywhere in the country. john: all right. so travel agents. if i help prepare a vacation trip for people, i'm supposed to have a license? >> that's right. in eight states. john: that means i would have to pay thousands of dollars. >> you have to get bonded and have a license. if you and i wanted to form a travel club, that would be -- we would have abide by all these regulations. >> and some states don't have these rules and people somehow manage to do okay. >> that's exactly right. john: finally. you know what this is it's called a growler people bring this to a grocery store or a specialty brewer to get it filled with their favorite craft beer not in florida. >> they'll come and bring their bottle and see we say werk fill them. >> it has to go through an outside distributor before it goes to any restaurant or bars. >> he supported a bill to legalize them, but first he wants his friend a political donor to approve his decision. >> now, he says that's not fair. i was consulting with all my stints. but it is the rule. >> you must not be consulting with the consumers of florida who want cheaper better quality beer out of growlers. (?) you can buy a barrel of beer in florida, but you can't buy a 60-ounce growler. >> i assume they're not idiots. there's some reasons for these rules. >> to keep out competition. big beer companies don't want the craft beers to compete. it's very expensive for for them to bottle and can their beverages. >> interior decorators, hair braiders, floor sanders, landscape workers, makeup artists, teaching assistants. >> there's an absolute epidemic of overregulation in this country. people really need to start wondering what's going on when street performers are being regulated as they are. >> and the people hurt most are the poor people who want to get a start up. first rung. >> it's the first rung of the economic ladder. those are the people who have a problem affording the time and the money that has to go into so many of these occupations that are reghtsd. john: thank you. when we return, i'll show you how to fix poverty. lemonade for sale. fifty cents. who wants some stossel lemonade? >> am i being arrested? >> you're being retained we're going to need to check you for weapons. >> these guys had the nerve to offer home improvement. >> are you kidding me now? >> no, sir. sadly the police weren't kidding. the bureaucrats prowled put that on their website to demonstrate they support california's stupid job paying rules. you better have a license. unfortunately, the license is difficult to get, costs a lot of money. that is one reason why many americans don't work today. don't even try. it's my last guest that explains in the protection of protecting politicians make it hard or illegal to go to work and this is just tragic. >> there are 7 billion on earth. fewer than 1 billion have any level near our comfort. more than a million live in miserable poverty. we try and spread the wealth. and that fails. what's most owrnlsz about that to me is that we now know what works. it's not spreading the wealth. it's economic freedom. when countries have it, people prosper. here's a list of countries that have it. america is now ranked 12th. sadly we used to be near the top, but our bureaucrats keep adding rules. now, we're less free than canada and denmark. now, look at the place at the top of the list. hong kong. they don't have political freedom. that's why there have been big protests there, but hong kong never really had political freedom before the communists took over. they had to obey british rulers, but the british rulers did something wonderful. they enforced rule of law. countries need that. there are clear rules that everyone can understand. you can't kill anyone or rob your neighbors. if you have property, others can't take your stuff away. hong kong's british leaders enforced that and they punished anyone caught robbing or killing. then they did something very clever, nothing. benign negotiating. they sat around and drank take away. people left alone with rule of law (?) people in hong kong made themselves rich. they moved from third world poverty to roughly our level of wealth in just 50 years. the other countries at the top of the economic freedom list are prosper too. so we know what works. economic freedom. but politicians keep (?) wrecking that. >> what does it take to open a lemonade stand legally in america? i once tried to open one outside bill o'reilly's studio. i failed. i tried to follow my government's rules, but they were endless. the government said i had to take a 15 hour food protection class to sell lemonade perform after this, there's an exam. then i have to wait weeks to find out i passed. if i did, i had to buy a government approved fire extinguisher. to sell lemonade legally would have taken months of paperwork. so i gave up. fox's lawyers said i could briefly sell lemonade only if i gave people refndz and got the le lemonade back. there's so many rules here. i have to go you your money back. >> i lose. i shouldn't have sold it to you. first my customers thought this was crazy. >> she's right and so many silly laws keep people poor. in iraq, starting an illegal business takes almost a month. you have to get permit after permit. those are the rules in much of the world. in america, it's easier in some states like nevada and here in delaware where i managed to open an out door shop in a few weeks, but in business friendly delaware it wasn't easy. i had to register with the delaware -- get a federal -- delaware state department of finance. but in delaware this can be done in just a few days. and it was good i had done it legally, this wilmington cop made sure i had my vending permit. in contrast in hong kong i got permission to open a business in one day. it's the reason that hong kong got rich. they encouraged entrepreneurs to try. fewer rules bring better lives and make almost everyone richer. that's our show. we'll be back this time in the week. of obstructing an inspector general's investigation into the secret service prostitution scandal. the scandal that rocked the secret service two years ago. the "washington post" today reporting a white house aide was directly involved in the solicitation of prostitutes in a cartagena hotel days before a presidential summit in 2012. the inspector general investigator revealed he was instructed to withhold evidence. he told senate staffers, quote, we were directed at the time to delay the

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