like all the developing countries are, but in the long run they're a tiger. >> he's 100% right. the only worry is the political instability. >> that's true, a worry. >> neil: and getting along today. and we continue, now. >> the same week the badgers vote to keep out big government, president obama pushes for a bigger public sector. >> the big challenge we have in our economy right now is state and local government hiring has been going in the wrong direction. >> brenda: so is hiring more government workers how to get the economy booming again is this hi, i'm brenda butt sner, this is bulls and bears. here they are, tobin smith, gary b, and john, welcome. bigger government the best thing for the economy? >> brenda, this is worse for

the economy and bigger government means one thing, bigger spending and being right now, uncle sam has no money, that means bigger deficits. we've been going through a three-year experiment now of more government, more government, more government and the results are in, last month, we created 69,000 jobs in all of the united states of america. so, what our economy needs right now is is a boost and electrified in some way and spending has proven to be not the way to do it. i think what we need is a dose of dr. romney. >> brenda: jonas, that hiring was done by the private sector. the federal government is pulling back and president obama is saying, no, it needs to hire more. is that the answer to this tepid recovery? >> i think it was the answer about two years ago. the private sector mostly state and local governments are shrinking. and the governments i should say, the corporations are hiring, just not hiring fast. ideal lie you have big government when there's a

retraction in private spending and no hiring. like we had, you know, one or two years ago, at this point when you're actually seeing regular hiring, you want the government to kind of step back and not compete with the private sector and not hire as many people. we probably should have hired more people 0 and federal level and now it's hard to shrink government. that doesn't always work, and it's a nice theory, but at this point i would say get out of the way and slowly, but surely taking on the job. >> gary b. i'm sure you have a list of government workers you'd like to hire. >> well, i -- i'll demure on that one, brenda. i think it boils down to simple economics. so, let's just -- the dollar is a dollar. is it better spent by the government or the private sector? studies have shown that the multiplier, in fact, how much a dollar spent by the government adds to the economy is very often less than a dollar. so, a dollar spent by the government adds less than a dollar to the economy. why? because it crowds out private

investment. so, would you rather have the government spend the dollar or the private sector spend the dollar. most cases hiring more government employees doesn't produce any usable goods and services, at least not for a long-term. again, where is it better spent? the private sector where, you know, you have your apples, your googles, things like that are produced and that's why the private sector needs to keep the money. >> julian, state and local governments have been cutting workers and federal government not so much. but, should we be hiring more government workers in order to get the economy going again? >> well, when you have a stagnant economy, i largely agree with jonas, when you have a stagnant it means that businesses aren't investing or consumers aren't spending, which is what we've seen, a little under 2% growth right now. the keynesian economic theory most economists still subscribe to, is that government makes the to fill

the gap. invest in teachers, and fire and infrastructure. what's the evidence? we had a 2 1/2 trillion dollar hole in the economy when obama came in, filled it with 750 million dollar stimulus package a third of which was tax cuts and went from losing jobs a month gaining six month averages 200,000 a month. 1 million positive swing we were at negative 9 gdp. now positive 2, a 11 point swing. i think the evidence there is that stimulus, stimulus works, particularly when we're in a time, either a recessionary time as jonas said or stagnant. close to .2. i don't think, most economists challenge the point that government stimulus works when we're in an economic down turn. >> brenda: the issue here, toby, is hiring more government workers, bigger government. does that mean better economy? >> well, no, it doesn't. and let me take you to one of my favorite countries, france. because if the percentage of

government employees brought wealth and prosperity and a growth economy, sacre bleu, france would be the world's largest economy, but they've been the slowest developing economy growth through the last 25 years and every year of the last 25 years had a higher percentage of government, you know, of government to private company workers and as they continue to go up, they continue to stagnate and the exact same thing would happen here. >> brenda: jonas? >> but that's beside the point. france doesn't ever get rid of the government workers, that's the point. a permanently large government is going to be a drag on the economy and we haven't had a small government since 1920, somehow worked out. the idea is to increase or pick up the slack during the recession and step back. and as long as america doesn't keep growing the government in a recovering economy we will never be france. >> that's exactly-- jonas is exactly right. nobody is arguing, toby, we're

at about 25% of gdp in terms of government spending. nobody is arguing we should be staying at that, we should be 20 or 18% historic averages. jonas is right when we're in a sluggish investment period, consumers aren't buying and the government can step in and fill the void, which is what keynesian economics is all about and it's is working. >> brenda: and i know that some of these economists don't agree with keynesianism. but we have 21 million people work for the government. how does all of that add up? i mean, if we keep hiring even more government workers, we're never going to get to the point where we get the right mix. >> well, i think it's easy for julian to sit there and spout off with the democratic talking points, but the fact of the matter is, we've seen supply side economics, we've seen spending on top of spending on top of spending, we've seen massive deficit spending over the last three years and we've seen absolutely no help to the private sector.

private, small business owners have no certainty in front of them. they see no sanity in their federal government policies and they're afraid to hire workers, what we need to do is focus on giving the private sector some certainty, some reasons to go out there and forecast to hire people in 2013 and not rely on uncle sam to keep writing checks. >> and let me respond to that if i may. >> brenda: go ahead. >> i gave you very, very specific facts not democratic talking points. you didn't respond to the economic data i put out there and point two, if i may finish. >> and that, that hasn't-- >> okay, let's -- julian, one-- >> you did not respond to any of the data. secondly, under the last three years we've actually seen taxes gone down for most businesses. we've seen help to the financial industry, which has worked, we've seen help to the auto industry. the idea there hasn't been help to the private sector is a ludicrous statement. that's all spending in the private sector and health and financial institutions-- >> no, tarp is not spending. >> brenda: let me go on to gary b.

gary b, you can respond. >> well, first of all, let's not even argue with the left's talking points. the fact. matter is, each of these jobs that julian grew cost us what, $500,000 per job, $250,000 per job. you would hope that some jobs would be created with all of that. the economy stopped growing so the government can step in, why? is there a demand for more people in the department of commerce and department of the motor vehicles? they go we can hire more firefighters and teachers, teacher to student growth has not abated in the last 20 years, we have more teachers now than 20 years ago. is there a demand? my point is, for all of these government services? no. if there's no demand out there, the xh i is telling you something. the economy is saying, okay, we need to pull back and hunker down a little bit. there's no need for the government to come in as it has done, run up deficits to create this demand that's not--

>> do you have any idea how many students are in-- >> julian, i'm sorry, okay, that's got to be the last word. thanks so much. guys. all right, so add mcdonald's to the list. the euro crisis taking a bite out of sales. with so much uncertainty out there, is it time to end it here and extend those tax cuts now? believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's anothereason more investors are saying... [ all ] i'm with scottrade.

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who developed cancer from the toxic ash of the world trade center collapse. the 4.3 billion dollar program would include people with 50 different types of cancer, helping them qualify for treatment and potential compensation. i'm jamie colby, back to bulls and bears, right here on the fox news channel, the most powerful name in news. . >> brenda: a big mcbummer for mcdonald's. the fast food chain warning that europe is biting into profits. the president needs to take action here and do what, gary? >> well, i think we need to keep the tax cuts going, brenda. gets simple to what we talked about a few minutes ago. everyone should look at themselves and say who is the better steward of our money, us or the government? the government creates companies like solyndra. the private sector creates companies like apple.

if the government had successes like apple i'd say, okay, yeah, maybe i should give more money to the government. the second point is history. when is the economy taking off? took off under the kennedy tax cuts and reagan tax cuts and it took off under the tax cuts we're talking about now, the bush tax cuts. is the level point, yeah, clinton raised taxes, sure he did, but the economy took off under clinton when he cut under the capital gains laws. and the evidence is in and makes so much sense to me, it would be ludicrous to let the tax cuts expire. >> brenda: jonas, the white house press secretary did make clear this week that the president will not extend the tax cuts to the wealthiest americans. is that going to hurt the economy? is that going to hurt job creation? >> there's no part of the economy you can tax and not cause some sort of drag on job creation or the economy. whether it's on the upper brackets or the lower brackets. you can tax workers and all of a sudden want higher wages and

that's going to hurt job creators as well. and one thing worse than raising taxes in an economy. it's when the government collapses and that's really what's happened in the other countries, not that they raised taxes and increases, but they are going under because they spend more than they raise in taxes and that's worse than what we're doing, and the reason that taxes are going up automatically next year and cuts are kicking in, because we have to do both to prevent that from happening, a good emergency solution in a government that doesn't get together and make any deals. it will be a drive, but prevent greece from happening here. >> brenda: toby. >> tax cuts for everyone. why? so there's a little silly notion that what creates jobs is capital. to have capital you need to have profit. when you have more profit, you have more capital and guess, what you have more jobs, tax cuts for everyone. >> brenda: julian, what do you think of that, tax cuts for everybody? >> right now, yes, but to toby's point, it's a matter of fact that government investment has created digital technology, the internet,

laser eye surgery, a host of others, and falls to what gary said. the debate about the tax cuts, we're referring to the clinton rates, creating 23 million jobs, a record creating under the last two decades and if you're, you know, pure keynesian, as i am, you don't increase anyone's taxes as jonas said in an economic stagnant period or recession and you don't cut the government spending, but the question is what are you doing in the intermediate term if you're interested in the deficit. if you're interested in the deficit. something comes on the table, it's simple math. 25% of gdp in terms of government spending, taxes are at 15% of gdp, which are historic lows. taxes have never been lower in this country than they are right now. even conservatives are agreeing that government spending ought to be somewhere between 18 and 20%, so if that's the case and taxes are at 15%, they've got to come from somewhere. so if it's not the bush tax rates, it's got to be as the simpson bowles commission says, you've got to put it on the table and can't just say--

>> how do we create jobs? even president bill clinton came out this week and said, excuse me, president obama, we need to extend these tax cuts, and the small business owner, i can tell you this, there's no certainty in our future right now. we don't know what our health care bill is going to be next year for our employees, we don't know what our tax bill is going to be next year for our employees, we don't know what our gas prices are going to be next year for our companies. so, what we need is, a little bit of certainty, tell us our tax bill is not going to go up, and then maybe we can start attacking the job problem. when i know what my tax bill is next year, then maybe i can start the forecast, if i can hire a couple of extra people. >> president clinton did backtrack on extending the tax cuts to the wealthy. gather i b, i'm going to give you the last word here. >> every time we tried to raise taxes, people stop working and shelter income and move things around. tax revenues, a percentage of gdp stays exactly the same. so, again, where would you

rather have the money, in the private sector or public sector, i'd rather keep my own money and spend it efficiently. >> thanks so much, a good debate. >> if you lose, sue. some public unions taking their case to court off voters shoot down their pension benefits at the polls. cavuto's crew has the new tactic to stick it to taxpayers, that's the bottom of the hour. up here first, some democrats pushing a $10 minimum wage to put more money in workers pockets. someone here says scrapping the minimum wage altogether is the way to maximize your pay. how does that work? find out next. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because offers a superior level of protection,

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>> lawmakers pushing for a hike and minimum ways to take a hike so we can make more money.

and you ought to

to move it to 10% or $10 an hour and mitt romney, the severely conservative republican candidate for president supports increasing the wage and indexing to inflation. it's probably only going to affect 4 million workers at most. the argument here is for everyone that says the big problem in the economy is taxes, they're at historic lows, 15% of gdp. ain't doing that much to get the economy going. the argument on the other side. we need to put more money in consumer's pockets and increase the demand side of the equation and that's what's going to get the economy going, and that's a lot of the thinking behind trying to do something on the minimum wage, stagnant until the '60s. >> brenda: okay, gary bment unemployment among young adults is 12.1%. what would getting rid of the minimum wage do, do you think? >> i think that the unemployment amongst basically the teenagers is what you're talking about would drop dramatically, looking in fact, look at the reverse side.

what has it done since we raised the inm mum wage the last time. it's skyrocketedment unemployment amongst black teenagers, as a matter of fact, is like 25, 30%. so, it certainly hasn't helped and toby is right. you're not going to just-- we tried this under nixon, wage and price control kind of thing, it didn't work. my jaw drops when we say let's try it again and let's mandate that employers out there that have two teenagers, 7.25 an hour will now pay both those teenagers $10 an hour. and it's not going to happen. >> brenda: jonas. >> first of all, this country no minimum wage and 30% unemployment in some places in the world doesn't mean that's a great scenario either. and-- you have to do what the president wants to do, index it until it's not a political thing to raise it. i don't think that would cause problems in the lower end of the work force if you raise it to 15 $20. that would cause unemployment, that's what it would do. >> brenda: hold on, let john get in here, go ahead. >> there are people with jobs

out there who are barely holding on to them right now. small business get faced with a mandate to raise their pay, they're only going to have one thing to do, they're going to have to cut people to continue to pay a few people. so, to me, there's no way you can justify this being a job systtimulative plan from a smal business perspective it's going to cause people to cut jobs. >> brenda: thanks, guys, appreciate it and thank you to julian for joining us. >> thanks for having me. >> brenda: coming up, stocks snapping back, seeing their best week of the year after last week's pounding. and one of these guys says, one stock is it ready to rebound, just the same. [ truck beeping ]

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>> jobs, higher by 25 percent. >> and are you a bull or bear on that? >> i would like to think i am

bearish. >> what do you think? >> i like father's day. you think about long cutting although i really don't cut my long. >> just madeny highs and going up by 20 percent. >> what do you think it is getting trimmed out. >> what is your prediction. >> mcdonalds warned about the global economy. it is time to tep back from the fancy places. >> jonas ever eaten a french fry. what do you think of a mcdonalds. >> it is a bear and you are killing them and they have 35 percent of the revenue out of europe. >> your rediction. >> our friend the fed is now laid the cards. 50 percent higher summer, they