kontbalm, gary, what are those guys doing right. >> helping and letting businesses flourih. i'm in florida, a billion dollar tax cut tousiness over three years, great economic development agency that helps business like other states than california, which raises taxes and takes money out of the economy and puts it into the government's hands, which is huge for a state like that and florida is getting its act in gear. >> what do the candidates have learn fm these governor neither one of them has exactly the same policies. >> the first thing we can learn is five out of the 7 governors in the swing states are republicans. so, a lot of the mcro republican policies seem to be working athe state level, and, rick talked about florida but look at wiscsin, scott had to go up against the reca to get collective bargaining with the unions, and, john sich, the

same in ohio and, he has gone out and had about 18 tax cut plans, he's straightened out the tax code in ohi and the are the types of things either presidential cante needs to implement, going forward. to start creating jobs again. >> susan, john makes a good int, fighting unions and collective bargaining, going up against regulations. thosare all things that seem toe working on the state level. should the candidates be looking at this? >> you know, on the regulatory front i do agree with john but, e notion that tax rates are the panacea and theolic magic wand is completely false. you look at iowa, for instance they had a1% -- highest corporate tax rate of any state in the country and the lowest unemployment rates, 5. % and nevada almost the lowest tax burd on a personal and corporate level, almost the highest unemployment rate. tax rates are not the panacea, the governor romney and a lot of reblicans pretend they are, but i think the business climate is an important issue d takes

into account things like investment, in infrastructure, skilled labor force, as well as regulay burdens. >> toby? >> well, susan, iowa has a lot of farmland and they are doing okay. you can be geogrhically correct but let's talkbout regulatory. becae both in iowa, colorado, for instance, i know many companies that have left lifornia for colorado, specifically because their cost of doing business was more tha 20% lowe and they voted with their feet. i think th regulatory one is the sleeper one. we have added somethg like 32,0, pages of additional regulations at the federal level, at the state level, colorado got rid of a thsand, i think that is the right direction. >> gentlemen, should the governors get the credit for what is going right in some of these states? a lot of this is coming from the federal government. handouts. >> they shouldn't get the credit, goodr bad. look at the margins, a lot of the things the panels are

talking about are true, nice to have an owner-iendly business enviroent, and lower taxes but there is something much bigger going on and you can tell, nevada and florida have no kack tax and are the worst states in the countrfor labor markets at this point. and if you go to zillow and start home prices in every state against the unemployment rate you'll see why some states are in the crapper and some aren't. because they never had a housing bubble in texas or wisconsin. they had one in nevada and florida and it destroyed the economy. don't let bubbles build like that in the economy, at the least build up resources, so when it pops you aren't broke like a lot of the states. but that is the driver in the economy... you just made a poi i wanted to make, in florida, and nevada they had anher issue, the housing bubble, that is -- and, it is tse policies that governors are coming out with, lowertaxes, less regulatis, and let businesses flourish and guess what? it is businesses who do the

hiring, and, the permanent hiring. not the tax burden government, governments, are hiring, from taxpayerdollars, right now, things are getting much much better and if housing gets better you will see florida flourish like you afternoon in years, the expectation here. >> susan, john made another good point about the fact that t majority in these swing states are republican governors, wha does it tell you? >> you know what? 41 states had lower rates of employment this month. its not just about the swing states and i would contest jonas's point, look at my beloved home state of new jersey, governor christie saw unemployment rising under his tenure, 9.8%, now, 2%, over the national average, that was not because of the housing bubble, because of bad policies, hs not trying to help the middle class and shut down infrastructure investment and is going after teachers and education and u see the results. >> you can make the argument -- to counter the point, new jersey

and new york have almost identical unempyment rates because it is the same labor market and regioand, you ve totally diametrically opposed gornors and, you have new york, an the new jersey governor and they can get the unemployment rate to stop moving, beuse ultimately they work in financial services which... >> the president can't do anything about micro segments of the economy. he needs to do stuff about the big stuff and athe big level we know marnal rates of the corporations make a difference and stas where they've gone after these massive union systems, and open labor, we can do that at the federal level, it doesn't matter whether you work in finance or not. jonas, madison, wisconsin versus michigan. >> the difference is, states balance their budgets and the federal government doesn't and the presidential candidates don't... >> and to susan's earlier point,

lest we not forget governor christie inhited tremendous budget deficits. >> he has been in for three years, come on, so has obama. >> and cut jobs, even in the public sector which many of the other state governors haven't had the nerve to do. >> if president obama owns the economy, governor christie does, too. come on. >> okay. looking at a national level, taking these policies, what uld the presidential candidates learn from? from these states that have lowered their unemploymt rates? >> well, first off, there are two things, the word "certainty." there is so much uncertainty in the system, i sak to so many small businesses, as well as big businesses, they don't know where the heck they'll be next year. put serpent back into the system as far as tax policies, regulatory policy and just letting business know they are behind them, the thought process, that business owners have, that we're okay again and not have all the roadblocks, let

employment flourish and you see unemployment come down and the big thing nationally that kept employment up for the last three years and not where it should be like five or six percent is that one word, no one knows where we'll be next year on tax policy and regulatory policy and if there is certainty in the system i promise unemployment will come down. >> we haven't talked ohio and the policies on their energy dripping and opening up both public andrivat lands, again, macro level, big level, 4 million jobs, romney is -- probably 10 million jobs from energy policy done right. >> our own neil cavuto heading to one of those swing states on mondayor the final presidential debate in boca raton, florida, be sure and be there, at 4:00 p.m. eastern here on fox ns, neil will be joined senator john mccain, florida governor rick scott, former clinton press secretary mike mccuy and many, many others. then on fox business, full

debate coverage from 8:00 p.m. to midnight. your election you cotry, your money. your future. all on the line and no one covers it like neil. before that, neil is going to tell you what this guy is saying, just proved our national debt is now officially a national security risk. at the bottom of the hour. up next here, who says you can't go home? one in three homeowners expecting not just tir adult kids but their parents to move back in with them. sounds like a bad sign for the economy. why is someone here sying it is good for the economy? headline

log on foxnews.com. >> from an empty nest back to a full one. a new survey of homeowners revealing one in three are planning for their adult kids or rents to move in with them in the near future. you might think it is a terrible indicator for the economy. but, john, you actlly say it is good news? >> i think it is. you have to stop somewhere, much to the dismay of my friend, tobin, a lot of people moving in with their parents are doing it for one major reason, to se money which is now a lost artn america, thanks to se of the federal policies we have. there is no incentive to save money and secondarily, when those people areoving back in,

they are fixing up the basements and painting the rooms and buying wallpaperer and rugs and we have to start somewhere, buying durable goods,iring a handy man and paint company and these are the building bcks to getting a new president and back on track. >> what ds are you talking about? i've never seen a kid buy a new rug. >> for the 27-year-old kids. they are not -- they are coming home to save up. >> and that is what it is. mom and dad again. jonas, go ahead. >> these kids... >> they aren't doing a lot of me renovations in the sement. i'll say there's a big issue and that is at, i don't think either candidate or president is dressing it, theseids are coming out with $100,000 degrees, that are in history and in things that are -- film and willot match with today's workforce. and they are not a good fit to where theobs are today, plus construction workers out of business and, they will be burdened by debt and, it is sad.

right now i is the easiest time -- i wish when ias out of college, you could get a fha loan, and, y have a hou and don't have your parents breathing down their neck and they are going home, over that and it must be a bad labor market and that is wwe he to address, not the patch work things. >> san, this is a sign people don't have jobs, they are ghting, you know, debt. debt is now a trillion dollars. for student debt at this point. >> that is a huge issue. i wouldn't say it is necessarily only because people don't have jobs but i think a lot of people, to john's point, which i agree wi are trying to be more economical abo their livg situation and is a great trend to see they are trying to save and help pay down theebt earlier, rather than just spend a lifetime in debt. never getting into the right kinds of jobs and never becoming more productive members of the labor force because ty are saddled with the debt. >> gary k., a couple of boys, expecthem to come home? will thebe boomerang kids?

is that good for the econy. >> i love my sons and one came home this weekend, from college, brought home a dog and the dog, you kn what on the rug. and i have to buy a new rug... there is nothing good about 20 somethings living with the parents. for the most part these are people who don't have a job and if they don't have a job, they are spending and not spending and the economy is wsening and the economy worsens and you get a vicious cycle. i don't see anything good about that. i love my sons to live with me the rest of their lives, that is how much i love them but for a sign the economy is getting better you'll see the opposite and jonas, youre right. this is the best time for -- to have a job, because interest rates are so low, the ability to be able to buy a small condo or something with 3%, it is free money at this point in time. >> tell me, thiis kind of the way it used to be when generations all lived togher

and saved money... >> and they didn't like it. where are is the stanley b. smiths, i love you but, get the hell out! from an economic standpoint. >> there might be a personal ise there! >> the economic thing is, we're not getting household formation, which represents 1/2 of 1% of the entire gdp of the country, so on and so rth, by breaking the cycle, and, theseids aren't buying cars, they don't buy cars anymore, no cars, i don't know. >> what do they buy. >> video games. >>ll right, the last word, guys. you can always lock the doors. all right, welfare spending now topping $1 trillion a year. topping $1 trillion a year. why isn't poverty being ♪ music

kids will spend 15 minutes watching online videos like this one. brushing for two minutes now, can save your child from severe tooth pain later. two minutes twice a day. they have the time.

>> this is and eye opener, all of our spending on welfare programs, now topping a trillion bucks a year, which exceeds the budgets of social security, memedicare, and defense. since lbj declared war on poverty in the '60s, one study shows we've handed out more than 15 -- get this -- trillion dollars with a "t" yet the poverty rate is still at 15%, and is throwing more money at the problem making it worse. >> it is, and unfortunately it is not a fincial issue, it is a cultural issue. look at also the changes in children born, out of wedlock an divorces, and, single parent households, usually a female and, no high school degree, that is where poverty comes from

and the idea of paying stipend, will change the issue is naive and we are not defining the problem and, we try to solve it with the wro medicine. that what is we do here. >> what is the real problem. >> some of the welfare spending is the college grants in school and fwig-- they are trying to help, and it looks like wasted money the surface. but when the war on poverty started and lbj kent arnd the country, people were poor and the perty level was mal nourish. and no health care and today, i don't want to say you are oay. when you are poor but at the poverty level, there is a lot of heavy peop on food stamps and you have a certain level of medicaid and you are better off because ofhe programs, it doesn't mean they don't need to be cut or tweaked and it's not just this part of the budget, i are everything butefense is welfare spending when it boils down to it. social security is welfare spending, if you don't put inasmuch as you are getting and medicare, too, if you took it away, most 8-year-olds could not

afford health care, and i don't want to target the poor, but across the board the government needs to cut spending down and also, half the country is slipping through, that is the problem, the administration hasn't addressed and the programs will grow proportionaty and most growth happenedetween '08 and '09 cause of the economy, not because of major changes, because people are getting poorer and that has to be addressed. >> gary k., there is some level here, that if you keep giving people money and handouts, it eates a certain culture. >> it disinntivizes people and all the money has not lowered poverty or welfare, the war on verty has absolutely failed when you take a trillion dollars a year from producers, and hand it to nonproducers, you cannot expect good thing to happ. you've got to turn nonproducers into producers. and you are not giving them any incentives by handing them over a check. we had welfare reform in the '90s and we are turning it on

its ear at this point in time and we are aertising for people to go on food stamps, and wered the restrtrictions to get them. this is crazy. i want to hear the advertising and programs to get these people off of welfare, not onto it. >> pel grant, and, these are not -- if you look at the numbers, direct cash aid has gone down from the bush administration. so, obama has actually reduced the levels. and the main spending here is health ce and the reason it is increasing is because health care costs are increasing, which we see aoss e economy and across the board in government, the percentage of health care spending is the same as it was in the bush administration. >> i guess you haven't read the food stamps numbers. have you read e food stamp numbers. >> i have but other social services are goingown and cash aid numbers are going down, health care is 45% of the spending, not food stamps. >> john? >> if you want your kids to grow up and become productive, you don't hand them an allowance every week, you hand i every

week when they put the garbage ou you have to incentivize workers to want to lift themselves up, and by increasing the handouts to them, is not giving them any incentive at all, except to sit therand take in the obama administration's new picies, of expanding the new types of things that are considered work, under welfare. >> okay, that has to be the last word. thanks, guys and thanks to susan for joining us. we always appreciate having you here. >> great to be here. >> the big great over big bird, drivinup one name and how it could lay you a golden egg.

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>> predictions, toby. >> aol for e-mail, they were old but a new sysm is coming out, and, i think it will help the stock up, 40%. >> john, bull or bear. >> bear. sorry. toby. >> no worries. >> what do you like. >> about to blow up no microsoft takes a bite out of apple, 20%, by year end. >> gary k.? yolike that. >> no. earnings down, revenue down, going no place fast. >> what do you like, thn? >> i'm worried about a risky market, i'm going low beta value stocks and the pharmaceuticals are acting well, pfizer, 20% in 6 months, and trading ten times earnings andcting -- >> bull or bear. pipine for 20%. >> prediction, jonas. >> okay, you cannot get a costume for halloween, big bird, because of the hysteria, hasbro,

because of their... they can be selling these all day long, up 20% a year, definitely. >> you are so cute. tobin, a bull or bear. >> you talked about a gag for this and the egg color will n be golden. >> throw it around. >> i'm not throwing him anywhere. >> you know what? the letter of the day is "c" for cavuto, cavuto on business, up next. ♪ >> neil: finally the president focusing on the $16 trillion debt, one problem, he's not our president. is president. i'm neil cavuto and ahead of the final foreign policy debate, fox on top of the nut cracking a number and maybe he has our number. iran's president questioning how long americaan remain the rld's number one power, with such massive debt. so, if he is getting it and