show tonight. >> and now, john stossel. >> america is a rich country. it seems wrong when there's so much wealth around some americans are still so poor. can't government do something about that? yes we can said lyndon johnson. it called for taking more money from rich people and putting it into welfare and job training. i believed. i was in college then as these students are today. my professors told me that the experts in washington had found the solution to poverty. i believed but then i became a reporter and i watched the war on poverty work or not work. i watched as it created a poverty industry lots of victims and bureaucrats who specialized in sucking money out of washington, d.c. over the years most poor people stayed poor. they are still poor. how can that be when we spent so much on poverty programs. >> this year we will spend $1 trillion and over the next decade welfare spending will top $10 trillion. >> that video was made by the republican study committee a group of congressmen worried about governments sending the committee chairman is congressman jim jordan. you want to cut poor people off? >> we want to help them get to a better life. we create programs that help people get to a better life. >> i have heard that before. how are you going to do d? >> you do it by not waving t-- wavering the work requirement like this administration did. >> just to be fair they haven't totally waved t waived the work requirement. >> they are letting some states not have a worj requiremek requ. that one key element that helps people get to the american dream experience greatness and get a job and grow and get to a better lifestyle. >> work. >> the key ingredient to accomplish anything that we all learn. >> but how? that was already in the original healthcare reform act. you have a new welfare reform act. >> with all of the spending the government does it's about 600 billion a year when you factor in medicaid and the 70 plus different programs that are out there. >> the original act just was welfare didn't hit the other 70 some programs. >> there are so many nutrition programs job training programs educational, healthcare programs. wouldn't it be smart to have four. make everybody eligible for work. >> we had a district two weeks ago where we said food stamps let's put in a work component for food stamps. have a critical length that helps them get to their dreams. >> what about the truly hopeless or the mother with 6 kids how is she going to work and take care of her kids? >> we are going to be willing to help individuals who truly need it. but the best way to help those who can work is get them the skills they need to do. it's like anything else in life when you have a requirement when you have a deadline it influences behavior and helps people get to a better experience and better life. >> according to politicians when more people get food stamps, one in 7 americans get them it's actually good for the economy. >> if you want to create jobs the quickest way to do it is to provide more funding for food stamps. >> create jobs by -- with food stamps. more money will be out there they will spread it around that will make jobs. >> it would be laughable if it wasn't so serious. former speaker of the house of representatives making that statement. you are taking money from someone else. you are taking it and redistributing and giving it to someone else. that's always a problem government acting as a middleman and government deciding how it gets allocated. the second is it's just the facts. it doesn't work. big government spending and regulation going to get us out of this economic mess when he would we would have been out of it a long time ago. you are taking it from one giving it to another that's always problematic and it hasn't worked. >> another attack on you not you personally, you republicans. democrats say conservative attack on the social welfare programs is being paged for the very wealthy. my god can we do any more to help the wealthy than republican friends? >> it is in your own personal life any one in your audience think about the occasions where you accomplish something of meaning and significance. i call them moenlts of real magnitude. you worked hard and made it happen. what we are doing unfortunately to so many people dependent on government we are robbing them of that experience which is central to being an american. congressman kneneil is wrong he trapping us into the culture of the government robbing them of that critical experience we have all had and made us a better individual, a better neighbor, better husband, father, whatever made us a better american, better citizen. that's what we are robbing people of when we are giving them things and not requiring those key skills and traits and character qualities that are necessary to accomplish this. (applause) >> the first welfare bill that president clinton reluctantly signed perhaps people said there would be people starving in the streets, that didn't happen. half of the people got off the rolls and the poverty rate went down. they were happier. >> first thing that ever got passed i was joe wrestling coach. >> you look like a wrelsing coach. >> i don't know if that was good or bad. >> i was a wrestler. >> well form reform bill in ohio which required time lipities. after you are an abled adult we will no longer pay you. no one got kicked off because deadlines influenced behavior. deadline was coming they said i am going to get a job or i am going to get the skills so i don't have to get kicked off of public health or public assistance. those people moved on to a better life. >> the committee made the video to the welfare reform their version of it. >> 2.7 million families successfully moved off welfare. we can do it again. help get americans out of poverty and save the country from bankruptcy. welfare reform act of 2011. >> what's with the video there the picture? >> i am not sure. we have some great young conservative staffers like folks in your audience tonight. >> libertarian. >> that's not the same is it? >> it's different. >> welfare system is so complicated government can't keep track of them. remember acorn? they used to get millions of tax dollars then the video of them helping a pretend pimp hide from the law led to congress killing their funding. acorn is gone. except that they are not gone. they just changed shapes as dan epstein of the tax payer watch dog group cause of action. what do you mean? >> my organization has been looking at acorn in the affiliates over the past year and we have seen there are now 174 ghoups out there at least some of which including the mutual association of new york here in new york city are getting tax payer dollars yet we don't know what they are actually doing with that money. >> it's not acorn. these are new groups. it's not the same thing. >> these are groups that have the same directors have the same tax id numbers tame employer identification numbers in many cases the same employees. >> congress cuts them off they change names. >> i can tell you when i worked at the house over site committee as an investigator we went to an inspector general's office and an auditor told staff when we found direct evidence of say corn housing misusing federal grant money the auditor said, look, it's $10 million. it's a $10 million grant. when you are dealing with that little amount of money we don't send an audit. >> these are poverty workers i assume most of them are helping people there are a few bad apples or acorns. but so what if it's the same people. they weren't all trying to help the fake pimp break the law. >> it is special concern if they are getting our tax dollars to engage in politics. they are not decreasing the role of government. they are not increasing social welfare. they are putting an additional burden on all of us americans because you think about things like the community reinvestment act. you were talking about the clinton administration that was something acorn housing pushed for. they lobbied in front of bank of america then nations bank in order to get these guarantees and now what we sees bank of america foundation gives millions of dollars to these acorn groups in order to get them on their side. this is -- oo >> to get them off their back. >> this is krohnism. acorn uses it to say had you had, neighbor works all of these government programs that came out of the clinton administration give up money, too. >> thank you, dan epstein, congressman. stick around audience would like to question you. coming up we will talk to the guy in charge of welfare in may town. this is america. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day afr day... block the acid with prilosec otc and don't get heartburn in the first place! 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[ male announcer ] if you can't afford your medication, astrazeneca may be able to help. ♪ [applause] >> they support limited government. the reason many in government don't appear on this program. i was surprised to get this e-mail. i have admired your reporting if you ever want to talk to someone with experience running government social service programs i would be happy to. that came from a boss of the big piece of the welfare state the you human resource administration association. they ploy 15,000 people who give benefits to my neighbors food stamps job centers and so on. commissioner door runs the office. welcome commissioner. i appreciate you coming on my show. >> thanks for having me. >> i admire you for trying. my assumption is that your bureaucracy teaches people dependency. >> that's wrong because we have a work requirement in the welfare program. when welfare reform passed the welfare case load was 1.1 million now under mayor bloomberg it's 360,000. we enforce the work requirement aggressively you put people to work in all kinds of work experience type activity. we have continued to do that. we do that for single individuals on food stamps as well. we have a work requirement and we stress it every day. in most audiences where i go around the city of new york there are lots of people telling me i shouldn't do that but we still do. >> that you are too tough? >> that's what i get told. >> you have 5,000 employees i assume they want to help people and they direct them to jobs. 10 years in they are just going through the motions. you can't fire the bad ones, right? >> we have something called job stat. we call our center directors in on monthly basis how are they doing getting people to work? he we set a goal. 85,000 last year. >> places meaning. >> get a job. getting unemployment. >> it doesn't work for every individual. not everybody steps up. we have programs that assist people while they are moving toward this. >> of your employees can you fire bad ones lazy ones without going through unbelievable hoops so you don't even try? >> the civil service rules in new york are difficult if you have people who aren't doing exactly what you want i would acknowledge that. by and large hra employees do a good job. one thing you will find in welfare policies. the discrim tive people on welfare caseworkers see them every day because they go to work they are showing up every day and they expect the same for people who ask for assistance. >> as i said i suspect your programs teach dependancy encourage it now and then i go to your centers and interview people. >> no jobs around? >> no. >> have you looked for a job? >> i can't work right now i am on disability. >> there's nothing out there? >> there are no jobs? >> we heard that again and again then my researchers walked around within a couple blocks and found 40 businesses hiring. within a few blocks they offered jobs for beginners. the people getting handouts don't bother to apply, so i wonder as i said what your employees really do at the job center. i asked a college intern to go ask them for help. tell them what you did. >> i went to a job center downtown in new york city i said hi, i am a college intern and i am looking -- >> the same job center where they were saying there were no jobs. >> i said i am looking for a job what can you do to help me work? they showed me i could go and apply for food stamps they wouldn't help me unless i was receiving handouts. >> you tried another? >> i went to another job center and skad tasked the same thing sid we don't give jobs we give out food stamps. >> did you get on assistance? >> i did not. >> she didn't get the benefits. >> she was looking hard enough she would have. >> i wasn't looking for assistance p. i wanted to work. >> could you have gotten assistance? >> i am sure i could have applied if i wanted to. >> she didn't and didn't get the assistan assistance. >> you kept looking for jobs. >> i went to a work force center in harlem i took the train up there the same day. they turned me away. they said you can't help me yet you need to come back at 8:30 in the morning and go to a jobs training session. >> she could have found a job on her own more easily than going to all of these government help centers. eventually they got you an interview. one sent you to the food store and you will talk to do the manager there he said what? >> i went for an interview it was a public open house where any one could walk in. i waited an hour and a half spoke with the manager told him my story. he said he rarely xhaun kates with work force one. they never call him never ask any questions. i asked how are the people that they send, are they people that you want to hire? he said no. >> the fact is welfare case loads are 360,000. test as low as it was in 1965. that's because we have a work requirement in new york city. that is absz slutolutely gr. i am thinking 15,000 employees we are talking about employment there is some of it. it's like the soviet union. >> we do more than just cash assistance. we provide public health insurance, adult protective services child enforcement goes after dead beat dads collected 700,000 dollars for families with absent parents. 200,000 for moms on welfare. it doesn't just do cash welfare. what's funny is the old cash welfare program is much much smaller than the rest of the agency in the old days it was a big part of these. >> now medicaid and medicare are much bigger programs. do you ever think gee we are trying it's hard to fire people. i can't manage the way i would if i were in the private sector that charity would do it better? >> no, i don't. i don't think charity by itself would provide public health insurance to the number of people we provide in new york city. the fact is employers don't provide for low wage workers insurance any more. they don't. i don't know what happened to the healthcare market. >> i don't think the hospitals would be able to survive without some form of public health insurance. i think if you want to talk about welfare spending make sure you make a differentiation between medicaid spending which is 30 billion in new york city verses cash welfare which is $1 billion. there's a difference. in medicare you are right healthcare costs are driving this country to bankruptcy. don't blame it on poor people seeking welfare or food stamps. on that note thank you. stick around our audience has questions for you. coming up, how is america like the places where this goes on? also some solutions for life after the welfare state. 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[ male announcer ] fedex office. now save 50% on banners. >> the show tonight titled after the welfare state mostly because i like the title of this new book. it's meant for you younger people and it argues it's your job to undo the work of the welfare stages politicians like bismarck. he started social security germany. then in america roosevelt, kennedy, johnson, nixon, bush, obama and so on. the atlas foundation which produced the book made this video to introduce it>> welfare state is disappearing with a sea of red ink. children born pay taxes for benefits for elders. government debts keep growing short sighted politicians are steeling the future from young people. >> tom palmer edited the book. what do you mean steeling the future? >> politicians have robbed young people of their feuture. they are required to put money into it's a pyramid scheme to pay current recipients. >> social security, medicare medicaid and they are going to get stuck fwith the bill for it. the unfunded liabilities are staggering. $80 trillion is the present value of just the gap between what they are going to tax and what they have to spend. >> there's no money in anybody's account there's a promise there are more people who expect to get our healthcare paid for. >> the so-called trust fund is an iou. it is in a file drawer in west virginia. iou $80 trillion. college students have to pay it there aren't enough of them. people my age rudely refuse to die. >> that's one way. exactly. even setting aside the life-span going up, the system was broke. it's a pay as you go system. if any private company, insurance company, investment scheme had this financial structure the ceo would be in prison. bernie madoff is in prison. he could have been the head of social security. >> your book is titled after the healthcare state what are they supposed to do about it? >> it makes me take responsibility for myself. be realistic. those benefits are not going to be there. they have been promised but politicians cannot go good on it. this is going to come to an end. now the question is what is going to come after. >> what happens to poor people the commissioner of welfare in new york city said private charity won't be enough to help them. oo >> first thing to remember the welfare state isn't about the poor. the vast bulk do not go for the poor. it comes out of the middle class cuts out of one pocket and a giant handling fee gets taken off. >> over 14u7b billion a year. back to the poor. he says charity won't take care of it. i think most people believe that. it is wrong i will tell you why. first of course is self help. helping people to help themselves. second isn't charity. charity was the third thing people look to. mutual aid. people taking care of themselves. americans prior to the welfare state were big joiners of associations. 30 percent of 1995 are members of lodges. >> this is before the welfare state? >> yes. >> a third of the adults joined the mutual aid society which helped each other. >> they helped each other in all kinds of ways they provided benefits and hospitals think about all of the mess sonic and shierns hospitals out there. those were built voluntarily to help members of the community and to help indigent or people who had bad luck. primarily they were people helping each other. most have been wiped out by the welfare state. not wiped out physically but people said gee the government couldn't do this there is no point in our doing it. >> why pay twice. fist you are paying the tax then membership dues. they were displaced in western europe and the united states>> they said we can do better. >> we can create giant constituencies that reinforce each other. >> you talk about 50,000 employees in the new york city welfare system. every one of those is a voert also. they don't like to see the systems cut. cut. >> you argue that these mu tile aid societies would take care of people who need help if they were still around they would do a better job if there were 50,000 plies? >> it would, can and should. no question about it. one example that works well it is invisible to people. out there 24-hours a day. you can call someone to talk to if you have an alcohol problem. there are meetings every night of the week people can go to to feel like they have a problem. >> it works better than government rehabilitation programs. >> thank you. thank you tom palmer. next, a new place without a welfare state. we will take you there next. we will take you there next. 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[ male announcer ] jill and her mouth have lived a great life. but she has some dental issues she's not happy about. so i introduced jill to crest pro-health for life. selected for people over 50. pro-health for life is a toothpaste that defends against tender, inflamed gums, sensitivity and weak enamel. conditions people over 50 experience. crest pro-health for life. so jill can keep living the good life. crest. life opens up when you do. ♪ joh (applause) >> in america the welfare state grows and government takes more power. i am not optimistic as thomas jefferson said the natural progress of things is for liberty to yield and governments to gain ground. he said in years ago he has been proven right. what if there was a way to create a new kind of government a more limited one. free market for a work expansion a free city where americans would coulmove. a central american city will have its own police force no income tax, no sales tax, no capital gains tax. only property tax and no federal regulation. sounds good to me. the man behind it michael strong joins us now from honduras. you shame on the show a year ago to discuss the idea of a free city. sounds like you made progress. >> we have made considerable progress. >> we will be going to great ground 30-days after the government. identify the reasons and also appointing a governor for the regions. >> already the honduran legislature passed the bill authorizing the general principles 126 to 1. so they are behind it. >> it was incredibly popular. the congress realizes the best hope for prosperity is to go to the development regions that were successfully in china which has city scales development region also due by which had 110 acre region which had its own legal system. they had british common law bay ain't national financial center one of the greatest financial centers in the world. >> due by has shir rae allah. >> except for due by financial center where they realized by importing british common law they attract international capital. the state of shirea law they could not have attracted billions of dollars in specifically capital of the financial institution. they were simply very practical. they took the best legal system in which to do business in this case financial business. honduras through the special development region is going to have the best kinds of legal systems for creating businesses of all sorts. >> you are going to use texas law? >> we are proposing to the perspective honduran governor that a texas legal system without u.s. federal law is without law. most respect and feel comfortable with texas commercial law and many hondurans accept commercial law. criminal law is separate where the governor will have to determine what that is. but we believe texas commercial law is a good brand globally for business and that will help attract significant capital to the project. >> you have this area where united 150 miles to where you are in the capital. some left wing capitalists in honduras say you are going to steel land from a honduran tribe. >> that is an understanding there were various versions of the project that were near there that there were problems with various people taking indigenous tribe land. we are hundreds of kilometers away. as a matter of principle we are buying options on land from private land donors who have clear title who fell at market prices. >> americans are going to go there and say i am going to open up factories? >> they accept people around the world being interested in opening factories. our goal is to be the most customer friendly on earth. we think of some companies nordstroms provide great customer service. what if you had a government that provided really great customer service it was efficient and transparent. that's a pitch a lot of businesses would like. >> what if the politicians in honduras change enough of this cap lis tick experiment? >> no politician wants to be against specially created jobs even when hard left wing president was briefly in charge of honduras. he doesn't touch the free zone you don't touch something where hundreds of thousands of jobs were at stake. we believe the legal infrastructure including laws against appropriation and requirements a country compensate a company for pro creation one layer of protection much better to create jobs for hundreds of thousands and millions of people and give them a vested stake in protecting this. >> thank you michael straw. good luck to you. i should add that you are not just in this for the money. you are a libertarian who along with john mackey and the others just want to prove that this works? >> i actually came from there. many college students i used to think government was a solution market for the problem. learned economics they studied under noble laureate realized i was an idiot with respect to economics. once i learned that mcapitalism creates job. why are they for it? they don't have jobs. if you create a properly structured free market system with good rule of law secured property rights economic freedom entrepreneurs create hundreds of thousands and millions hopefully billions of jobs. that's the best way to create global peace and prosperity. i am a passionnal believer in humanity. i want to create peace and prosperity globally. give peace a chance let us create millions of jobs we will have a bert world. >> thank you michael. >> coming up it is your chuturnd the audience's turn. college students question our guests. also we will look at the ultimate result of the opposite of free cities. the bloated welfare state. music: "make someone happy" music: "make someone happy" ♪it's so important to make meone happy.♪.♪it's so e ♪make just one heart to heart you - you sing to♪ ♪one smile that cheers you ♪one face that lights when it nears you.♪ ♪and you will be happy too. ♪ john: we are back with your questions or comments from my >> we are back with congressman jim jordan robert dorr and tomorrow palmer author of "after the welfare state". first from facebook john asks could a collapse on the welfare state ever be peaceful? i don't see a collapse happening without chaos. >> i think absolutely they had this gigantic lumbering welfare state. in the 90s they had a hard question. this is not affordable. they had some ways to go but they managed to trim their welfare state dramatically in sweden where they think of well stair state. it is less socialistic. most companies in new york have more free labor markets. the cuts are much deeper than most are willing to address. they can be made if you have an adult conversation about it. it's not about fantasies or wishes it's about math. >> the question for the congressman. how do you image that we can over come the bipartisan issue the bipartisan consensus on such controversial issues such as welfare reform? >> look that's why i have elections. people always say i didn't mean why don't you compromise with the democrats. the folks in my district didn't elect me to compromise with bar ram obama to raise taxes they elected me to stop them. we to make the case. we have a few more weeks in this campaign. when we win like i think we are going to we will have the mandate to do what we think needs to be done. >> a lot of folks who run and work for private charities and nonprofits themselves believe the government will do more rather than less. why do you think that is if they do such a better job than the government does? >> what we have seen is they have become effective in lobbying. i don't give them any money. to give money to that organization they spend a lot to get the government doment their jobs. >> i understand the rationale. they say we are doing gad work. all of the government is going to give us more money to do more good work we will take it. >> astonishly infective. many have become addicted to welfare. the welfare state corrupted civil society as well. that's one of the deep problems with the welfare state is they encouraged dependency even among people who dedicate their lives to helping others directly. >> commissioner door i admire your great intentions of trying to help. >> since a butt coming. >> but think a department such as your shed individual responsibility helping by having us in the back of our minds saying oh we don't have to take care of it we can leave it to the state. >> i agree there is a sense among individuals that now the government is doing it i don't have to. i see it i am involved in my church group well. peop people think that is bad for america. how long do you think it will take if we succeed in ending the welfare state for mutual aid societies to return? >> first point the welfare state is going to end itself. it is broke it's bankrupt. it cannot sustain. i think we need to begin this is where politicians and office holders have an important role finding a transition getting people into saving for themselv themselves. big ago gra business you have to cut out all of the waste of the expenditures maybe stop invading other countries that will save a true frl dollars right the-- a trillion dollars right there. >> teach through strength. you want a strong military to project strength. remember our allies they treat the number one ally state of israel is flat wrong. third you knead to rethink foreign aid. i have got a colleague who has great line. you don't have to pay people to hate it. they probably do it for free. we need to rethink foreign aid and what's in the best interest of our country. here's the bottom line. the world is a scary place. it is a dangerous world out there but it is a better place with our history our heritage, they need to be careful about it we need to lead in the world. >> when we return my take on life after the welfare state. 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[ femalannouncer ] if you can't afford your medication, astrazeneca may be able to help. ♪ john: after the welfare sta, >> after the welfare state., that's an optimistic title to an end to our current instwuktive system that's by no means clear. in europe today people demonstrate and riot to protest almost any cut backs. they have an absurd welfare state. in grooet they no longer pay civil servants extra for coming to work on time or for using a computer. teachers can no longer retire with a pension at age 39. european welfare states are still biering than ours? our welfare state now grows faster than theirs. is this what we face? once they get the free stuff they fight to hold on to it. our welfare state money will run out. people can't keep giving themselves free stuff. they can keep voting for it but the money hwill run out. mitt romney expresses what i fear when he says about 47 percent of americans are people -- >> who believe they are victims who believe the government has a responsibility to care for them. the healthcare as move to do housing. >> when people feel entitled to government handouts they tend to do this when governments take the handouts away. they will learn what's going on in europe. okay probably not. americans don't pay much attention from the news from overseas. but a few countries did reform their welfare states without bloodshed. canada of all places. 30 years ago socialist canada cut government spending. canada cut from 17 percent to 11 percent just like that. what happened? canada prospered. the canadian dollar rose from $0.72 to a buck and $0.02 today. less government was good for people. even for poor people. 11 percent government leaves plenty to help the helpless. in fact 24 percent weren't taken from us we as free individuals would do more to help the poor. it is closer to people who serve better at separating those who really need help from those who need a push. mitt romney was criticized for giving most of his charity money to the mormon church. a writer said he gave virtually nothing to any program that focuses directly on feeding the hungry. it's clear that romney's donations are about taking care of hoinz. this is just ignorant. religious charity helps lots of poor people and mormons help lots of nonmormons. for example they have a monster warehouse filled with food. they give it to any one in need if any religion. when the earthquake hit haiti the mormons got there before any government help did. after hurricane katrina same deal. even the new york times reported that mormon trucks were the first to arrive. pbs says the efficiency of the welfa moerm frmon apparatus trucks we there before they allowed the relief through. it is incredible fast and efficient. when people need help we should stop thinking government welfare is the solution. after the welfare state. i hope to live to