>> it's a great way to do that. from the private sector we know it works. all the public pension plans are massively underfunded, based on 8% return and they're getting 4 or 5%, some less. calipers, massivelily underfunded. it's good-bye u.s.a., hello greece if we're not careful. >> the concern is that we're going end up with fewer state workers. oh no, smaller government is better in my book so if we're going to save money and shrink government, it sounds like a home run. i hope they're doing enough. >> christian, you're worried we the government might lose out on valuablable employees. >> absolutely. it's not just about having smaller government, it's about having smart, efficient government. size is relative to value. if the buyouts succeed in losing

talented employees, the short term bottom lining gain may be long term public sector pain in terms of what services we taxpayers get. this is a tool. it can be used. i'm not saying you can't pursue buyouts but to think it's a magic bullet is wrong-headed. >> christian, you know more is not necessarily good. i mean washington, for example, d.c. increased their hiring in government jobs by 38,000 people in the last three years. by the way, he can't overcome the deficit in hiring just by doing tag. >> you know that the federal employee roles are smaller than under president reagan so we have smaller government. >> wait. >> the war on the president -- >> but let's get down to -- jonathan, you said you might as well take the money now while it's still there.

>> private corporations do this all the time and workers are better off because the pensions they count on are gone once the you no what hits the fan and the company is insolvent. 100 largest pensions have $1 trillion in unfind the liability. take the deal and work long term for -- let's shrink the size and scope of government and get back to the constitutional role then you'll never need a buyout and -- >> john, alabama governor offering this deal, basically offering healthcare payments or to take $15,000 in cash. it's not a ton of money. is it worth considering? >> of course it's worth considering because the deal might not be there. look, cities are spending 41% of their revenue coming from the state. they're not balancing their budget. the federal government has 40% of their budget they're borrowing from other countries.

once you haveny type of austerity measures in place, you'll feel it at the local level. take the money now because it may not be there later. to the state's point of view, you either pay them now or pay through unemployment. so it's a win-win for the states. >> christian, you can't deny our pension funds are broke. so get the people out while you can. maybe you don't have to pay them. >> it's one too. it may be useful in a lot of circumstances but again, i would like to remind everybody government employees provide valuable public services. it's not just a matter of items on a balance sheet. >> you're talking -- >> you want to make sure -- if i can finish, that you provide services in the most efficient way for taxpayers. if you end up buying out -- >> let him -- >> providing that benefit, then that's a problem. >> jonathan. >> nothing efficient about government spending, especially

in areas which have no role. >> oh come on. >> oh come on? government has spent far past -- we're insolvent, especially in areas like healthcare, education and science in which it has no constitutional role. talk about needing valuable government employees, make them more valuable available. >> we have to get wayne in. he's eating his pen over here. >> don't eat your pen, wayne. >> but christian, know there are cases -- these are facts. you can't -- you have to ghee argue with the facts. municipalities have privatized their fire fire departments, orr security departments, things like that and it's cheaper. don't tell me they're doing a better job and they're doing it for less money. it's not true. >> melissa, you seem to have had a rotten experience at the dmv. >> i was sent from one to another for six hours just to get plates renewed but that's

another ax to grind. the post office needs who shed hundreds of thousands of employees, they're burdened with legacy costs, a lot of them pension and healthcare related. they hit the -- it feels like a trillion but a billion dollars limit. they can't borrow more money and can't run it the way it is. it's a place they should spend less, let people retire and trim there. this from a woman to supports the post office. >> i love the post office. >> i'm surprised. >> they need to slim down like all the government, it needs to be smaller to work. spend less, fewer employees. >> let me say one other thing, if i'm a worker, i think i want this because i don't trust my government. they could be broke. i could be in the streets like the greeks. give me the money and let me go home and work with it. >> johnathan. >> it's a great point. the sooner we attend to these problems, the sooner we can fix them. we let them go for decades and they blow up like greece, spain

or other collectivist states. >> i'll come live down by you, right? >> come live with me in bermuda. what melissa says about the post office is right, they need to lay off 200,000 people. this is going on in cities and states. christian, you don't want to get rid of talented workers but they don't have the money. san bernardino is laying off school crossing guards. a lot of money comes from pensions and the assumings, that 8.5%, nobody's making that. >> christian, could it -- couldn't you argue that people taking a buyout could prevent a bailout down the road? >> look, i'm not against buyouts in all circumstance. i just suggest it's not the magic to solving state fiscal

woes. the reason pensions are underfunded is because of poor decisions. to think if we pursue this path where all of a sudden we're going to get government that's providing great cost effective service is not necessarily true. >> wayne, last word. >> i've side it. i think the proof is in the pudding. we know if you could privatize certain things -- john makes a point. there are five cities in the state of california that have gone bust. you can't just keep making this up. this is a solution, a good solution for the workers, a good solution for the cities, a good solution for the taxpayer. >> i say we take the buyout and go live in bermuda. >> come join me. >> it's a one thing both presidential candidates agree on. more government job training programs. who should pick up the tab? taxpayers or the companies looking to fill those positions? plus nearly half of the money states got in a housing rescue

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provide job training. >> we're going to make sure people have the skills to success. >> retrain workers for workers to get retrained. for the jobs that are out there right now. >> fixing or our training programs for workers. >> what do you know, president obama and governor mitt romney actually agree on something. both say america needs more government job training programs. something private companies are cutting back on. johnathan, you say corporate america, not taxpayers should train workers. >> i almost threw up in my mouth a little bit. the same government that failed at educating kids want to educate adults. forget for a moment the fact it's mentioned nowhere in the constitution -- companies for decades have done this from

henry ford to wal-mart, which has an extensive program that helps a lot of people. what governor romney should have said is government's role is a policeman, not a school marm. >> wayne, should the government train your workers in the bridal industry? maybe teach them to sew lace. >> we used to be a garment center in new york. it went overseas by virtue of competition. as a result you cannot find in the city of new york good pattern makers, people who take a design and make it into a dress so you have to train them, educate them. but here's the problem, we have lost a generation of that. mothers don't give their daughters -- teach them to sew. >> or their sons. >> or their sons or design or anything. it's a good example. yes we need it and private

industries should do the training. >> christian, it seems both the president and mitt romney think the government should pay for this kind of stuff. >> they probably agree it should be both government and private sector working together. put brass tax out there. other competitors around the world, do you think they don't invest in government job training for workers to make sure they compete in the industry that dominate the economy? the short answer is of course. if we don't want to fall behind we need to do the same. government and private sector workers. just because -- jonathan, most things we do today are not in the constitution. the constitutional writers were not as purist about the constitution not adapting to the times as you are, my friend. >> wait. let me bring melissa into this. >> well. >> let me bring melissa in, hang on. melissa, we have kids in the school system n theory, they're going grow up and learn

something. aren't we sort of paying for it? >> we already pay for training. it's called high school an we're not doing a good job. when did we get away from vocational strange? i love learning arts and humanities but we have to train kids to be able to go out and find a job. figure out what they're good at and what their career is going to be. we start in high school by training kids for the jobs of tomorrow. >> john, you work with high school kids all the time. what do you think? >> i'm learning how to sew right knew in bermuda. yeah, i work with high school -- >> that's not a joke, somebody's going to hear that and go out and learn. that's what america's all about. >> sewing in bermuda. the next industry. >> it's the next hot outsourced industry. i work with high school kids every day. i tell them you have to get a degree that matters. we're losing jobs in the united

states not because of competitiveness but the peck engineers in china, they have the ability to get a workforce. we're losing that. we're having kids getting worthless liberal arts and political science degrees when they aren't trained to do anything. >> math and science and engineering. >> outsource over the next decade because we don't have people in techs. >> jonathan. >> pushing kids is forced. i'm against pushing anyone. that's not government's role. if there's a job it needs training for, let the company who has the job do the training. >> oh, jonathan. >> no. >> oh what? >> wait. he doesn't have to be the government. >> it's up to parents. >> i work with kids every day. >> let me get wayne in here. >> when they don't have a focus, all you do is tell the kids, look, if you don't care about what you're going to do, get a degree in science and math. that's advising a kid.

that's what a parent does. if the parent is not there. >> exactly. exactly. >> wait. wayne. >> what a parent does. >> i have to throw to wayne because who is paying for this? i understand what everyone's saying, government or corporate america. >> this is not a throwback but a traditional thing. somebody apprenticed for a job. >> and government had zero to do with it. >> that should go on today in industry and be paid for by the employers. if i have ten people i have jobs for, i have workers who can train those people. that's putting brass tax out there. we don't have to make 'em. >> we can sew right here in the united states. darn it. >> all right, coming up. >> good luck with that. >> call it a housing rescue switcharoo. lawmakers spending money from a mortgage bailout to rescue mortgages and someone here says that's great.

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and discover another reason serious investors are choosing fidelity. coming up, taxpayer money meant to rescue housing, why are states plugging budget holes. >> both presidential candidates

hello i'm uma pemmaraju in washington. 17 days until the election. while governor romney and president obama are preparing. governor john sununu is live at the top of the hour. new information from eyewitnesses could explain why some people claim there was a

protest before the deadly attack in libya. a mob marched up to the compound chanting blood thirsty slogans. chair of the house arms service committee will join us live. police are saying a small wooden cross could lead to a 10-year-old colorado girl's killer. jessica ridgeway's body was found near an abandoned mine. >> turns out half of the money states got from the mortgage settlement with the banks not going to rescue homeowners, it's bailing out state budgets. melissa you say it could be a better use of money? >> bear with me. i'm going to turn into the punching bag but the only thing to solve the housing crisis is time, foreclosures, more jobs

and the economy getting better. there's no program the government can set up to make the housing crisis better. why not let them use the money to pay off the dumb stuff they committed to. don't encourage government to get bigger creating programs who help homeowners. this is a better use of the money. it's not what it was meant for but it's damages so they have the right to do it. it's a better use of the money. >> the money was supposed to go to homeowners and it's not. only a billion of the 2.5 go to the homeowners. >> right. i have to say i agree with melissa. even if it went to the homeowners, it wouldn't solve the crisis. it's shady going for a different purpose. in our culture, the notion is it's public money. wherever it goes to help the greater good is great. theft is theft, always immoral and destructive.

>> it's not theft, there's wiggle room. john, these people were hoping to get something back. >> yeah, but you can categorize it however you want. the money was to go to homeowners. if you think let's do something better, that's what the money was supposed to go to. the lotteries in the southern states, they said we'll help the education system. they put it in the general fund. same in the 1960's. if you see a dime on the floor, a politician is going to take it and use it for whatever he wants. to me, that's wrong. i don't care if it's legal, it's wrong. >> wayne, you have a smile on your face. >> i don't know why you expect anything else. they're going to take the money anytime and use it for anything they want. public be dammed. it's our fault because we elect them. they take the money and do what they want. >> christian, does it prove it was bad to begin with?

>> no it was to deal with fraud in the mortgage industry that affected homeowners. i have to agree with john and many others who said look, homeowners were supposed to receive some benefit from this. the suit was brought on their behalf to win an award based on their behalf and not to use money to assist them is absolutely immoral. it's irresponsible. while i understand some money should go to general funds because the housing collapse affected everybody, the majority of in a money should be for foreclosure assistance and homeowner relief. >> it was a bank job, a robbery of money from banks. the whole thing is ridiculous. >> hopefully we see the end of this disaster soon. christian, dorsey, we love having you on. thanks for joining us. >> good job, trace y thank you.

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get rid of them all together. companies don't pay taxes, customers do. people, that's you. the government doesn't need your money. >> amen. john, what you got? >> while you wait to see who emerges as the tallest midget, invest in safe stocks like bermuda does. >> wayne? >> i like the biotech sector. look at a etf called fbt. >> johnathan? >> i know i sound like a casandra when it comes to higher interest rates. they said the same about gold

in 2002dsvs goes up with interesting rates. inflation is coming, manipulation of interest rates. this is one to own and i own it in my fund. >> before we say good-bye, catch neil cavuto live at the final presidential debate. he breaks down your monday. don't want to miss the last showdown. "fox business," 8:00 p.m. eastern. have a great weekend. just 17 days to go in the election day and governor mitt romney leading nationally. but the race remains very tight. a key swing state with the president holding a slight edge. newly released polls show governor romney gaining ground in ohio. he trails by 3%. and among the extremely interested voters in ohio and florida, the romney-ryan ticket