i'm jon scott. we'll see you again next week. >> john: does government deliver? government claims it delivers. burr in reality. >> we do have passenger trains and this are hemorrhaging money. >> hemorrhaging your money. >> should government be doing at it at all and answer is no. >> john: to police officers to work for their union. >> we don't know have any idea what they are doing and we know what they aren't doing. >> john: even defense which government is supposed to do has approximate and postal service

can't close little used post offices. >> if this private enterprise had in would be closed. >> he closed parts of government. >> and the party in government. >> you, me. >> think they are generous. government incorporated, that is our show today. >> john: government incorporated that is what we called tonight's show. what does that mean. it means government means the private sector ought to be. making go health care, the mail. transportation. who can do it faster and cheaper if government steps aside and greet greedy competitors compete. we see that in real life. post office couldn't get there

in overnight. they bring in managers and they still couldn't. but then fed ex happened. united parcel service, they could. now even the post office does it sometimes. but the private sector does everything better. i'll give you a thousand dollars. you can name one thing that government does more efficiently. we need government to do some things i'm talking more efficient. there is nothing. but even though the private sector is more efficient but bureaucrats wanted their tentacles on everything. we are imprinted to believe that the specialists in washington know better. they are from the government. they are here to help. and they are so smart, but thing about what government did when they decided they should build cars. >> this is what you get. the trevant. pride of the eastern bloc.

it was a terrible car. it was hard to drive. makes huge pollution. but planners said it was great. >> once the berlin went down and they had private competition, it disappeared. people preferred toyotas an fords. however, -- >> when government runs things this is what you get. >> so we often get from government, lousy products and services that cost a lot. we need some government, but not so much, so much that it is bankrupting us. and he works for the government but you would be surprised how much government you won't miss. he is mitch daniels, indiana governor. >> you won't miss a lot of real estate they own.

you won't miss things like vehicles and planes they tend to accumulate. you won't miss the lousy service. we call it the yellow pages tests, it's in there and conceivably government shouldn't be doing itself. if it's in the yellow pages there are more than a competitors offerings it. you say government shouldn't do it. if somebody is doing this all day er day, maybe they are better at it. they have the incentive to get better. >> john: they just want money. they are greedy. you are a public servant. you are doing it for the people. >> i love the sarcasm you put your finger on the real question. >> john: people feel that way. >> yes, there is a certain, another form of greed, it's the human tendency to get ahead and make money and that is power over people.

that is the constant danger in government that needs to be guarded against. >> john: you mentioned that property government holds on. you leased some property in indiana. the toll roads? >> yes, we tollroad losing money and still hasn't paid off the bonds. >> patronage, i'm running the highway and i'm going hire my friends? >> yes. so we found a way to harvest the money we never would have had and rebuild roads with no taxes, no interest, no borrowing costs. meanwhile, we got the best tollroad we ever had. >> john: but you lease it to a foreign company. you really had to work to sell that. you had to convince people. you really fought for it. here a clip. >> this is the test. this is the time. there is no other way. there is no other plan and there

isn't going to be. you are either for it or against it. >> john: you were on fire then. i've never seen you that passionate. you really sold that. you calmed down since. >> i get fired up when i think that the future of our state is at stake. it was then. it was a better use of an asset in government's hands that was under performing. >> here is indiana running the tollroad for the people. this is private company, foreign company, making money for shareholders. >> we distrust business, labor and government for good reason. we don't permit monopolys except for government. why not? because they can overcharge and under serve their customers. the people running that road now had every incentive to put electronic tolling and less

congestion. to keep traffic moving faster. >> they run a lousy road or people will drive on some other road. they have a very positive incentive the what the state wasn't good at doing. >> john: even after you won the vote, 60% in one poll, a tollroad is bad idea. we're going to let a private company collect the toss. today the result? >> the result is we're building roads and only state with a building boom in infrastructure and didn't cost the taxpayers a nick. >> will one other controversial thing you did. you signed a right to work bill? >> all it means is that the workers decision you can't be forced to pay dues. >> john: union dues? >> as a condition of work. >> i was forced to pay to join a union to work at abc. new york is forced union state.

this place fortunately, i even not like having the choice. think it would be popular with people. >> it is about 70% plus of people that tha thought it was fair. >> john: you wouldn't push it for a long time. >> first of all, we had to see a real opening to do it. it didn't arrive until last year. the main point for right to work gets back to what think government should have at the very first priority. the creation of opportunity for people. if it does the job well, it creates the conditions where men and women create wealth for each other. we thought to continue indiana's climb up the list of very best places for jobs and investment made sense. >> john: i would think that right to work is just a stronger cause than the old collective bargaining fighting that happened in wisconsin with so much drama.

you say non-union members should not be prevented from having jobs. your protestors are saying, no, right to work, take a listen. >> union opponents right to work continued their chanting. >> fight to go send a message to arrogant people who think they can tell us how to live, where to live and what kind of living we can have. >> they are telling you arrogant, but i would think the union is what kind of living you have if you are forced to join? >> i understand it was going to be a emotional matter particularly for those that are committed to the union movement. come pulls other doots dues have been a yard natural, compulsory dues. but we got to the point where we were winning 90% of the time when businesses were comparing

more than one state. but we were being blocked from about a third of the opportunities. there is about one in three businesses were only only going to go to a right to work state. we had to take that barrier down. by the way, as soon as we did, there was flood of businesses that wouldn't talk to us before. >> john: you are sort of alone. let's put that map up that shows right to work states. all the states surrounding indiana are forced union states. all those businesses must be now saying, hey, this was the island of freedom here. >> we think we've been an island of pro-growth policies in general. this is just one more. >> john: you cut government jobs by 21% since you took office. >> we have the fewest state employees per capita and fewest since 1975. >> you were $78 million in debt now you have $1.5 billion

surplus? >> we just simply slowed down the rate of spending to about half the rate of inflation. over seven years, compound rate of spending is well under the rate of inflation. >> john: you just have to slow the growth? >> yes. you know, the food hangs pretty low in government, john. >> john: you passed the school choice bill. congratulations on that. you have the indiana economic development corporation. this sounds like crapitalism. why not get rid of these development companies and just lower the rules and taxes for everybody? >> first of all, that corporation that you are asking about, we never give out any cash like some states do. we measure them how inexpensively. all we do is give conditional

incentives. no jobs or investment. temporary tax relief. >> why have them at all. why not lower taxes for everybody. do you have to do this to compete? >> often you don't. but i see a lot of other states doing differently, very dangerous to give a politician a checkbook, do anything you want to bring jobs to our state. their incentive to cut the ribbon and they will be gone for the next job when the bill comes due. we are finding you can win without doing so. >> john: well, thank you governor daniels. indiana's is new rated number three in a state economy. you are not up there with new hampshire or south dakota. >> we're gaining on them. >> john: coming up. what if we got the government out of other businesses, like

amtrak and post office. we'll look at how that might work next.

>>. >> john: did you ever go to the post office's website? you probably don't. we do so you don't have to. the website says, since ben franklin was appointed the first postmaster general the post office has grown and changed with america. the post office has grown and grown so much it loses billions of dollars of your tax dollars now. the change for america part, not so much. post office is another government monopoly and government monopolys don't change the way private businesses do. but doesn't the post office have to be a government monopoly.

constitution just says, congress shall have the power to establish post offices. it doesn't say that government must deliver the mail. since governments are doing everything, why is america going broke are we still losing money in the mail business. let's ask mickey barnett. why are we still losing money, billions of dollars? >> two points, no taxpayer dollars have been lost. there are no tax funds go to the postal service. >> john: where do you get the money? >> services. now, we do have loss and ultimately the taxpayer could be at risk. your question is correct. innovation has been a hallmark what has been done in the last five years. in the last ten years we reduced the work force by 250,000 workers primarily through innovation. this is a business.

it's not a tax run industry. >> john: if it's a business you would fire workers if there wasn't enough work for them and you never do that? >> granted. we are like a government in the sense we want to be compassionate and do it through attrition. one of the main problems is very limited flexibility. congress has tied our hands. board of governors would and has a plan for profitability where the taxpayers will never be on the hook. >> john: doing things like? >> bar coding everything. >> john: kleog go small post offices? >> congress controls us to a great extent which is why we are quasi government agency rather than a private enterprise. no question, if we were private enterprise, many would be closed. >> john: you want the to do more but what is the obstacle? why do you say congress -- >> delivery schedules.

we must deliver six days a week. >> john: and congressmen all defend their individual post office and that little district? >> they do. >> mostly republicans? >> many republicans. john, you would be surprised this year we're very close to breaking even on an operational standpoint. >> john: close? >> we made a profit through 2006. last year. that is when the volume of mail dropped. 50% decline in single piece first class mail. >> john: get the government out of business? >> there is no one going to buy the postal service. it's mandated to go everywhere in this country. >> john: just sell it and if you live way the heck out you have to come into the local 7-eleven to get the mail? >> if congress chose that -- they won't allow that and i don't think the public would

allow that. we operated like a business if congress will let us. they may, a bill passed a senate and had a couple good things in it. the house is considering legislation zbleengts this has gone on for years and years and each congressman wants to keep -- you want to keep your local post office? >> all the parts that we have flexibility and control over, we are making a profitable enterprise. we do need more flexibility. we have a new product we want to market. it takes eight months to get approval through the prc, postal regulatory commission. yeah. >> john: no wonder you can't compete. sell it off. >> there would be no bidders would buy it. >> in holland they are making lots of people tried to offered to buy the post office in holland. it's making money.

>> i'm not expert on holland but i believe you facts 90% of the post offices were closed and the public is dissatisfied with the service. that is congress's decision. i don't disagree things should be run more like a business. we're trying to do that. >> john: and sweeten private sector competition, things sell. i couldn't even coming pete with you. >> you can put a mailbox right next to you. newspaper all over mailbox. primarily of security. it loses all aspects of the federal security of a mailbox. >> john: i would say we need private sector competition. when you talk to government people, they say why we need two mail slots. in this case, mickey barnett for coming in. on the subject of money losing

government monopolys. how about amtrak. do you know how much you pay to subsidize trains that rich people ride? we'll tell you. ♪ you want to save money on car insurance? no problem. you want to save money on rv insurance? no problem. you want to save money on motorcycle insurance? no problem. you want to find a place to park all these things? fuggedaboud it. this is new york. hey little guy, wake up! aw, come off it mate! geico. saving people money on more than just car insurance. trick question. i love everything about this cotry! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this eat land of ours has to offer like demolition derbies. and drive thru weddings.

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>>. >> john: another part of our massive government singed amtrak. our government railroad. it was created three years ago after a senator said a government rail company would be the last great hope to save rail passenger service. so how is that working out? randall o'toole specializes in transportation. we still have passenger triachbs >> we do have passenger trains and they are hemorrhaging money. when amtrak took over, congress

actually believed it would be able to pay for itself out of rail fares. they were cheaper than airline fares they would get a lot of customers. but since then airline fares have dropped and rail fares have gone up and costs have gone up faster so the subsidies are huge. >> john: costs would go down and costs often do and government thought it manages better. they didn't regulate freight rail. there we have this chart. the prices did go down. we measure this from the beginning of amtrak, amtrak prices went up, freight went down. >> if you look at the chart. they stayed about the same until about 1980 when we deregulated the freight lines. they got the government out of regulating the freight lines and freight went way down.

but with government regulation on amtrak, congress imposed how they manage their labor and where they can run trains and cost went up. >> john: one result they run trains from new orleans to los angeles, for example. that is most expensive suction did i. >> i have ridden this train. it goes through desolate landscape and it takes a long time. it going three days a week. it has the lowest ridership and some of the highest costs. >> john: get rid of it. except there are politicians that wants to keep that train going. >> john: so the rul the is the ticket price is $452, this is train ride for rich people. you can take the bus much more cheaply plus the taxpayer pays a subsidy of $437 a ticket. that is four times as great as flying. >> the government lovers would

say who are the private transportation gets a subsidy. taxpayer makes a contribution to flying and driving? >> there are subsidies but they do average to about a penny a passenger mile as opposed to 27 cents for amtrak. >> why don't they privatize amtrak? >> japan privatized it's railroads, they are making a profit. britain privatize there had, but they are being very innovative and attracting more passengers than european railroads. if we privatize the passenger train, i think we would get some passenger trains better than amtrak. but the irony is anthony haswell who called the father of amtrak because he proposed to create it back in the 1960s believes it was a mistake and we ought to privatize it. >> politicians want to hang on

and control so they can claim that the reason you have a passenger train to ride is that you elected them and you need to vote for them again. >> john: another arguments is that trains are green, it's not like the cars which pollute. trains are clean? >> trains most amtrak use diesel. same kind of fuel that our cars and trucks use. they preclude. they use a little less energy than the average automobile today, but automobiles are getting more fuel efficient much faster than trains. the bus is the greenest of all. the bus uses about third as much energy and emits third amount of pollution. it's not just green. there are bus routes all over the country where the local bus companie faster, more frequent service at far lower fares than the competing amtrak trains. >> john: but poll contingencies

don't find that glamorous. last point a criticism, case our viewers are skeptical about them. transportation blogger that likes big government. interstate highway system is the single biggest intervention in the economy, reading that you think it would be wonder of the free market. >> the interstate highway system worked it was government program that did it work. it worked because congress said first of all it will be funded by the users. we're not going to have general taxpayers, it will be funded by other taxes on the users. second awful we're only going to build it as the money comes in. we aren't going to build it and hope the money comes in. if we designed it and put it on pay as you go basis it might have worked. we didn't. we decided to have the government fund it that actually was the problem. too much money is the problem. >> john: i ride amtrak to washington and i this thank you for your subsidy.

i thank you randall o'toole. >> i ride the bus to washington. >> coming up a bigger part of government incorporated. defense is something government is supposed to do but the defense department's brownie recipe is 26 pages long. why would defense be any more efficient than anything else government does? [ male announcer ] if a phone rings at your car insurance company

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>>. >> john: i complain about big government but defense is something big government is supposed to do. but what is defense and what is empire building? does america need to spend as much on our military as all the nations in the world combined? yes says former ambassador john bolton. no says congressman cue seven after. president eisenhower was right to warn about a military complex that has too much influence? >> by that i mean, i f you look at the cost of the military they are taking a greater part of our g.d.p.. we need to understand. >> john: that is not true. it's not a greater amount, not a greater amount of our g.d.p..

>> they are taking increasingly larger amount. it's 3.35% of our g.d.p. i think we need to be aware. the economic effect of that inevitablely slows employment and causes diversion of resources that would be beneficial to economy. it's not clear that it actually makes america safer. >> john: ambassador bolton that is big question. how much safer does this make us? >> i think you have to look at the divergent threats the united states faces around the world, continuing threat of terrorism the real threat of the proliferation of weapons of mass destruction, nuclear chemical and biological. increasingly assertiveness of china. >> john: those are real threats but i think back to the past when russia had all those missiles aimed at us, we spend

more than at the height of the cold war or during the reagan build-up or vietnam war or korean war? >> if you add in the current cost of the conflict in afghanistan but percentage of g.d.p. has consistently been going down since dates of cold war. in fact even the obama administration secretary of defense has said if the cuts required by sequestration takes effect it will have a devastating effect on our defense. >> john: they always say that, any cut is devastating. congressman, i'll give you a shot on that. >> the fact of the matter is the war in iraq and afghanistan the wars according to joseph stiglich could cost 5 trillion dollars. we went into wargs of choice here. which have hurt our economy. in addition to that it hasn't made us safer. i respect ambassador bolton he wants ma america to be safe.

are we safe if we are the policemen of the world? do we have the resources to keep doing that and while other nations such as china or investing in the growth of their economy. >> john: i know you think we are safer because we police the world to some extent. economically, how can we afford this? >> we're not policing in the world in the sense of engaging in activity purely for certain intent. we are trying to protect american interests and the interests of our trading partners. if we provide some small measure of stability in the world, it has an enormous benefit for the american economy. if we don't protect the sea lines of communication, ensure stability for our friends and allies then i think the entire economic picture for united states darkens considerably.

>> but it's like the spending on automatic pilot. >> it is absolutely not on automatic pilot. we can see in the upcoming battle over sequestration, dramatic cuts are going to occur cur thatn in the republican party wants and probably a majority of the democratic party don't want. that hardly constitutes automatic pilot unless you mean down. >> john: the "washington post" head lined obama cuts defense to the bone and then some. so there is a lot of talk about that. we have this inflation adjustment chart that shows what really happened. obama's plan for it to fall slightly and flatten out. how is that cutting to the bone? >> any plan for budget that goes beyond three years is nothing but fantasy. i think everybody understands it. what we're talking about in the very near term, however are cuts in procurement. in personnel, in training. it will have a devastating

effect for years to come. if you don't believe it, look what happened in the next several months as defense contractors announced layoffs in the hundreds of thousands, talk about loss of jobs. >> john: when i say automatic pilot i'm thinking about how the navy and marines get 29%. air force, 27%. the army 26%. it's about the same every year. it's like nobody is really making hard choices. >> if you don't think between the services there is a vigorous debate over what the budget amounts to be, i'd invite you to go to the plgtd for a couple weeks. the amount may stay the same it reflects the judgment of where the threats are. obviously this has to be validated on an annual basis. we need to look constantly whether our priorities are right. i tell you in a world of increasingly uncertainty that argues for more capability in

our national defense, not fewer. >> i think most people are on john bolton's side on this. outcry over cuts. you are in the minority here smg the fact of the matter we have made choices, wargs of choices that have put us at an economic disadvantage. it is actually slowing economic growth. it is reducing employment. it's a loser. it's a loss of jobs, a loss of g.d.p., a loss of our trade and i'm looking from security standpoint, i don't know that america is more safe today with america raking over the globe looking for giants to slay. >> ambassador you said i was one of those blame america people these are war of choices and they create new terrorists that wanted to kill us, i'm wrong? >> you are wrong. they are not wargs of choice.

the issue is how you best defend america and overthrowing taliban and al-qaeda in afghanistan we made america safer. overthrowing saddam hussein. look i'm happy to put defense spending through an economic test and argue strongly for the proposition if we don't have a visible and important american presence around the orld protecting the stability of international commerce and communication and finance we will not have sustained american prosperity at home. >> john: thank you both. coming up did you know your tax dollars meant for the police to pay for full time union work? while some fiber ads use super models,

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>>. >> john: lib tear yanks complain about government trying to do too much. but one thing that government should do is keep us safe.

i'm happy too pay taxes for national defense and local police departments. until recently i don't l didn't know how much. your local taxes go to pay people that do nothing but work for their unions. i heard about that from clint from libertarian innings institute that won an injunction against this practice. what is the practice? >> it's called release -- released are from their police okay to do union work full time. it's one of big hidden scams in america. >> john: it's in the union contract to the police that you got to pay us not to patrol streets but also to do union work? >> right. to lobby, to negotiate against the city for pay increases. to ask for pension increases. to do union recruiting. you name it.

anything except patrolling the streets and keeping us safe. >> in phoenix where you are there are several people that don't do any street patrols. they do full time union work? >> that's right. there are six full time police officers that do nothing but union work and over 2,000 hours a year allocated for others. >> how much union work can there be? >> there is no end to it, john. >> john: it's kind of like a slush fund. they can do this work whatever they want? >> it amounts to a million dollars a year. >> in phoenix, taxpayers pay $4 million for 73,000 hours of union relief time? >> that is absolutely right. we have no idea what these people are doing except we know what they are not doing which is what they were hired to do. >> john: national president of american federation of government employees john gates says gains in quality, productivity. efficiency, year after year,

department after department simply would not have been possible without the rea and sound use of official time. >> there are some bureaucrats better off not doing what they are supposed to be doing. when you look at cops in particular. every hour diverted away from law enforcement is a serious lost hour. there are people getting killed out there. getting robbed. these folks are riding a union bus and earning the same pensions as the people who are actually risking their lives every day. >> john: so the judge in arizona says, you got a point. but you are the first person that has challenged it. >> it does. the unions do not publicize the nor do the government officials. would it be embarrassing we're paying them to not work. >> john: but to argue against the taxpayers? >> that's right.

in arizona they are paid to negotiate their own contracts. they are paid to lobby for billings that sometimes the city takes the opposite position on. it's absolutely absurd. >> paying police officers not to do police work. thank you. coming up, my take on government incorporated.

>>. >> john: government ink, that is confusing title for the show, government inc means a corporation. no corporation is as big as

government. unless activist said to me why do you libertarians worry about government power, why not corporate power. my answer was simple. government can use force. that is key. companies can't. no company can force me to buy its product. walmart must compete for my money. i can firewall mart by cross street going to another business. but we have just one federal government. we can't fire it without leaving our country. okay, election time we can fire the leaders of our government, but i just have one vote out of millions and when my guys lose, i must obey the commands of the majority that won. election only happen, two, four on, six years, companies face elections every second. we vote with our dollar bill. if walmart doesn't service better than k-mart or wawa wall mary loses our votes and maybe

goes out of the business. governments almost never shrink. this is why the evil corporations do things better than government. recently. mitt romney's comments sandwich wawa. >> i went to order a sandwich. it was a touch tone key pad. and sandwich coming out and you touch this. go pay the cashier. it's amazing. >> it's amazing. >> she is laughing because romney called wawa, so what. what is relevant that wawa does have a computerized way to order sandwiches that is fast and easy. they sell you a sandwich for less than four bucks. governmental couldn't do that. if government did it they would give you a sandwich you didn't want. as i said the governor daniels

the communist world produced all kinds of products leiblgs this car. this east german trebant. >> you had to put the oil and gas in separately and shake carted to mix them. a man in indiana happens to collecting this terrible car. >> there is no gas gauge. this is checking the fuel. >> he owns six. >> when governmental running things, this is what we get. >> that is why i wrote, no, they can't. government fails but individuals succeed. and groups of individuals in the form of private profit seeking corporations do everything better. politicians promise they solve approximate but they usually can't. for years the post office tried but couldn't get there overnight. then government allowed private companies to compete.

individuals invented fed ex. they could get it there overnight and make a profit. taxpayer suction diesed a.m. track loses billions but privately run transit are profitable because they have to be. despite the failures of government inc and transit and even the military. government keeps growing. feds employ two million people. for every hundred people. america ones had one government work. now, we have 16. almost as bad as greece that has 20. that is big reason that greece is broke and when they have riots when they suggest to cut government. if we don't stop the growth and let the private sector bloom. this is an election year and all the mainstream media talk, we should celebrate the private

sector. it's what brings us the best of life. that is our show. we'll have a new show next week on thursday. 9:00 p.m. on the fox business network. thanks for watching. what's with you? trouble with a car insurance claim. [ voice of dennis ] switch to allstate. their claim service is so goo now it's guaranteed. [ normal voice ] so i can trust 'em unlike randy. are you in good hands?