>> i love coal. >> neil: who doesn't? "cost of freedom" continues. you're watching fox. keep watching. we will not watching out for you. ♪ ♪ >> david: well, first detroit goes bust. will new york and chicago be next? the mayors of those two cities warning that their public pension costs are growing totally out of control, which is really what did in detroit. and many other cities are facing the same time bomb. is this proof it's time to scrap public pensions before they all go bust? hi, everybody. i'm dad asman. welcome to "forbes on fox." let's go in focus wi steve forbes, john candy, rich carlguard, elizabeth mc donald. should we scrap the public pensions? >> yes. get rid of them. what is public service? a sacrifice. it's supposed to be a short-term sacrifice before you go to the private sector

to produce real economic growth. the problem now with high government pay and the big pension plans is we're creating life long government workers that are a burden on the people working in the real economy. if you get rid of them, they have incentive to get in the real world and cities will no longer have pension problems. >> david: well, rick, and the pension problems are just enmous. new york city, just as one example. this is repeated in many cities over the country. it has 5,000 fewer cops now than it did ten years ago. but the price of the police force is double. why? because the pension cost have quadrupled. so we have fewer cops. 5,000 fewer cops. we're paying twice as much for them because of pension costs. >> i do have to start taking issue with what john said. i don't think policemen and firemen would agree they should be risking their lives as a privilege to service us. so you have to be careful with that. of you're right, david. look, in new york, 95% of every public employee doesn't con trent a nick to their -- contribute a nickel to their

retirement. that is not okay. we have to be careful. we have don't need to scrap the programs. we have can't forget about people working the career to respect the pension t time to reform them. >> david: that is the question. how do you do it? detroit won't be the only city that goes bust. >> yeah, the problem is, unless it does file bankruptcy, citys cannot disscrap most of the plans because they have state constitutions that say they can't do that. of the they have to know goshate with the unions to do it. what they should start with is having the 401(k) plans for the new workers and try to get the higher interest rates to annuityize what the oblation has been so far and cap it in the future [ the problem is with the public sector unions. they're not beholden to the taxpayers, we who pay the bills. they're beholden on the politicians. politicians rely on them to get re-elected so they have unsustainable deals. >> yeah, unfortunately, the politicians are mathematically ignorant. calpers that manages the

california state pension fund. it's assuming a 7.5% annual return. from now until armageddon. well, nobody is getting 7.5 today without putting their money at risk. 5% is a much more realistic assumption today. so mentions should be cut by a third right off the bat to reflect real market returns. >> david: emac, if you did that, you would have the public sector strikes strikes te supposed to be illegal in many places. they're not. they call in the sick-in days and so forth. that's what we'll be stuck with. stuck with chaos coming up soon. >> you're right. the politicians like mayor bloomberg who is focused on the big gulp sodas andalt in foods. i said it before, li you know the house is on fire and they're still smoking in bed. here is what is going on. >> david: good analogy. >> we see already reform happening. you can chge the structure of a pension. government pension for future hires. in to a 401(k).

they do need it in places like san diego and alaska. utah is doing reform. so is washington, d.c., we can also unfortunately, you can cut unfunded healthcare benefits. so they can be cut without going to court. that is already happening in stockton and vallejo. the irony here is that already alth reform may be taking care of is problem. health reform is starring to weigh whether to hire new workers or cut back on the city services. that is bottom line. do you cut back on the government services like police and firemen or do you reform the pension? >> did: is a byna, emac mentioned the private sector is doing reforms in their own pension programs. but if they try to do that in the public sector we'll see strikes everywhere. we'll see the public sector unions trying to shut down the cities. >> there might be but the other side of the story is the american taxpayers, they should haven't to shoulder the bill for unreasonable compensation pkages. what liz and steve said eaier is important; that is,

the financial landscape is shifting. gallup found current retirees are retiring largely on pension and social security. but those approaching retirement, future retiree plan to rely on the 401(k)s and the iras. it's important to remember people are getting more accustomed to doing these private, individualized savings plans. we need to start shifting with the younger workers. >> david: steve, this is again, we have put it off in the future. the problem is right now. what happened to detroit, they suddenly woke up one morning and realized they were broke. charlton, west virginia, they're paying for retiree cost out of the budget. that is a ponzi scheme. that can only last for a couple more months. >> making promises that you can't afford to keep won't work. but it will take another big city to go bust before you sit down and negotiate the other -- >> david: which one do you think it will be? >> it could be chicago. they have a disaster coming up in 2016. that might force something on

that. an area to get create i on is the health savings account for retirees and the current workers that give people money they control. it costs less. >> david: isn't the administration going in the opposite direction? >> yes, t there is nothing like reality if you're a mayor facing bankruptcy to sit down and do reforms. >> you want to talk about chicago? >> illinois is case and point. their pension costs are 2.5 times what the state brings in tax revenue. the taxpayers, it's so unfair. sabrina is right. it's so unfair what is happening to u.s. taayers across the country as the property taxes go up when we have beach lifeguards in orange county, california, retiring at age 5051 -- age 51, getting $105,000. >> i should have take than job. >> david: isn't the real problem the public sector union themselves? it's not like private sector you work in for-profit. their pay master is us, the taxpayers.

>> the real problem, the honest answer on both sides of the equation. you can say that people running the cities have been kowtowy to t the unions themselves. >> david: a little bit? a little bit? >> i'm acknowledgek it's a fair satement. >> we are seeing the same thing we see at the national level. no planning. you knew the day was coming where you get to massive retirement and the politicians didn't bother to worry about it. >> david: some people knew about this when they saw the creation of public sector unions. they worried about the teachers going on strike and a lot of things, including pension cost going too high because the politicians would promise them the moon for political support. john go ahead. >> even fdr worried about this. the point is correct. we have to get to the truth that the government emoyment shouldn't be a lifetime concept. the way to make it not that way is make the pay lower and not give out the gold plaited pensions so people have an incentive to get in the

productive private sector and not be a burden on taxpayers. >> david: sabrina, go on. >> we don't want to pit public sector employees against the private sector employe. the american people have a negative view of unions. >> david: where private sector unions are okay because they go againsthe management , the public sector unions go against us. us the taxpayers. we pay their bills. is there something screwy about the idea of public sector unions? >> there are. this is why 42% of americans feel unions should have less power because they feel they are being benefited at their expense. that is the problem here. who do we favor. >> david: rich, we started to talk about scrapping public sector pensions. at about scrapping public sector unions? >> great idea. they should be illegal. john said even the labor stalwart fdr was against them.

labor leader orge meanie. it created what will a uponsy scheme and it's collapsing. >> david: fdr was against striking of the unions and unions using collective bargaining. he favored public sec somewhere union but was against collective bargaining program. steve, there is no way to avoid it. the only tool the union has to get what it wants is a strike, right? >> one way to deal with unions is what the wisconsin and others are doing. give people a choice about paying dues. >> david: remember, the union mob in wisconsin lt their battle against scott walker. unions beware. coming up nextous have to deal with the high cost from the healthcare law, but not congress. no not their staffers. the presidenjust cut them a special deal. what is the big deal?

we'll dete and let you decide whether it's fair.

i'm jamie colby. i'll see you at 1:00 p.m. eastern right here ofox. have a great day. >> david: so much for lawmakers takinghe same medicine they impose on the rest of us. under the healthcare law, congress and thousands of congressional staffer were going to be hit with massive premium hikes. but now the president cut them a deal. guess who is going to be paying their healthcare cost? that is right. you and me. so steve, is this a good idea?

>> it goes to show cooking is so great, why don't they eat it? the fact of the matter -- >> david: it's poison. >> they don't like it. for the saying well, we'll have a brain drain, that assumes there are brains to drain. if there are, they should be in the private sector. eat your own cookings. find out what they're like. if they're essential give them a pay raise. >> david: rick, it's that we'll keep paying. we already pay. >> exactly. >> david: their salaries and benefits, the parking bills, et cetera. >> thank you. i'm glad you said that. i was going to. >> david: that is the point. we pay a lot for these guys. should we? >> that is a separate question. pit aside. i would say yes, you would say no. >> dav: right. >> this is a made-to-order p.r. thing for people against obamacare. i get it. this is the result of a little number that a g.o.p. senator told us at the beginning all went in a certain direction. ill-plan and it was silly. here is what is happening.

gong is treated like a small business. they can go to the exchanges. in fact, w have to go to the exchanges. they are entitled to pay a portion of the premium, pay whatever portion they decide to pay of their employees. it's no different than what happens to might be working at fox who has the insurance covered by the employer. >> david: okay. sabrina, there is a huge difference between the private sector. the difference is, as we're paying if bills for public sector. >> we always were. >> david: taxpayers are paying the bills. it now they have a new system that is supposed to be great for everybody. but not for them. >> that is exactly it. i think michael cannon at the cato institute put it perfectly. he said now we have a ruling class versus the rest of . obamacare is for the commoners, for the rest of us. all the people in congress a getting adamant. it's not just congress. that is what the story focused on. what about president obama and his family? what about the justice department and their families? the supreme court and their

families? federal judges and 1200 corporations and unions. this is picking winners and lewders at its worse. >> david: why are they called public servants? we are serving them, time and time again. this is another example. >> i know you feel like an oppressed vasil in system -- >> david: i do. >> david: 1% lives like princes and kings. it ain't surprising that forbes is the one that reminded us that the most affluent community in all of community is where? ch chase, maryland. they live -- chevy chase, maryland. they live like kings. >> let the poor slobs keep their plan. if steve thinks they are overpaid, let them put a bill through his congress to cut their pay. private sector people aren't taking pay cuts. >> david: all right. john, the fact is we've got a new healthcare law. all americans believe that texa, -- taxes, that we'll

pay more because of the healthcare bill. this is like insult to injury, is it not, john? >> yeah. d.c. the "hunger games." the last thing we want to do is create -- >> david: for those who don't know. let me, for those who haven't seen "the hunger games" and you should, it's a great movie. 1% of the population lives in the capital. 99% of the population feed them. they live like kings and rest live like paupers. >> the last thing you want is to create incentive for more people to go to work for government. if anything they should have a more homorous health plan to have incentive to exit government sector and not be a burden on us. >> david: mike, meanwhile, what they worry about, inside the beltway, the beltway crowd, they a brain drain. "the hill" newspaper came out and said the lawmakers are worried of a brain drain of talent and skill from capitol hill. god forbid they will go to the private sector. first, are you worried about a

brain dane? >> not at all, david. but that is a hypocrisy of the obamacare. a lot of people in the private sector said it's one problem with the bill, it will cause a brain drain in the private sector. they denied that and said it wouldn't happen. lots of people lost their coverage with obamacare. of it's just one more thing about this that the president said that is not true. >> by the way, steve, maybe we could use a brain drain. these are the brains that gave us this convoluted law to begin with. >> since they did, they can live under it. the private plans will be under the severe pressure. starting in the 2015. they are creating more part-time workers than full-time workers. it's a scandal. washington lives well. >> david: according to the president you are supposed to have the plan you want. on people getting what they want are those inside the

beltway. sarah palin is soundinthe alarm on the healthcare death panels and democrats are now worried about the same thing. her reaction to it at on "cashin' in." but john johnny manziel is under fire for collecting cash for a signature. should he get especially more cash instead? that is a flipside coming upñw

♪ ♪ >> david: johnny manziel, a heisman-winning quarterback from texas a&m u under fire from the ncaa after he allegedly accepted $7500 for signing memorabilia. that is against ncaa rules. but is it fair to dom down on players for doining what the ncaa and most other colleges do as a whole, turning sports programs in to cash cows with tv deals? corporate sponsorships. merchandise. time for the flip side. mike, you say let the kids make money. >> yes, absolutely, david. look. college football players already make money. but how much? they get scholarshiponey, stipend. should they also get money from licensing? i say yes. the ncaa acts as a cartel in negotiating as a group. huge tv deals and the huge licensing deals. the players deserve a piece of that. >> david: if the colleges can do it, why not the plays? >> i don't like thedea at all. i would change sports forever in college. would we have professor

steinbrenner negotiate with 18-year-old? you'll have more lawyers and bureaucrats at colleges negotiating the deals, so the tuition costs go up and the richest schools would get the players if they say yeah, you can get paid and you get chunk of our money for your autograph. >> david: i don't like the idea of more lawyers but on the other hand it's already changed, hasn't it? the whole college system of sports? >> hey, yeah. this is not roger staubach at the naval academy in the 1960s anymore. it is what it is. the ncaa is just embarrassingly greedy. they make congress look like saints. look, i look at it this way. why single out athletes? if i had a scholarship at m.i.t. and was doing engineering work, should it preclude me from working in the mmer and taking a salary summer job? should i wait until i graduate to take a salary? why are athletes singled out? >> david: what do you say? >> i don't think the problem is making money playing football. the problem is professional football players pretending to be college students.

we should end the charade of jocks taking joel courses and put the spor in a separate venture. >> david: steve, what do you think? >> you don't have to have a lot of lawyers on this. you just need a formula if you make a certain amount of money as a college football player like a professor doing patent with a college, the college and the kid gets a cut. >> these this is supposed to be about thetudents playing football or basketball. i think it will ruin the college. yes, the ncaa is greedy. i agree with that. >> the olympic games tried that and you had professionals playg anyway. be open about it. >> david: the world has changed. speaking of football, we have got the touchdown stocks that could help you score big profits. that's coming next.

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>> software. do you like it? >> no. of too stodgy. i wouldn't buy it. >> david: we don't like stodgy here. that's it for "forbes on fox." thank you for watching. have a wonderful weekend. ericbollerric bolling continues with "cashin' in." >> do you remember who got on sarah palin for talking about death panels? now look who says she could be right all. howard dean and growing list of democrats? sarah palin is here with her reaction. and a lawmaker under fire for saying government doesn't have enough of your money. >> we're not broke. there is plenty of money. this is just the government doesn't have it. >> now he is pushing the robin hood tax to get more of your money. we're all over it. forget the government using phone records and e-mails to snoop. now they may be able to use your tv to watch your every move. "cashin' in," w