it's the season of giving, man money?ould you give? >> will you help out today? >> what about this man? >> thank you. >> actually that's me. don't give money to beggars like me. i'm told governments must spend more. >> medicare, medicaid, snap and social security will reduce poverty. >> but does government really help the poor? >> everybody in cleveland low minority got obama phones! >> by any measurement, this isn't working! >> i'm glad more people have figured that out. even the singer, bono. >> commerce, entrepreneurial capitalism takes more people out of poverty. >> even some in the mainstream media. >> if you wait until the government comes in, you'll be

in for a long wait. >> wow. if they get it, maybe soon more people will realize there are better ways to give. >> beautiful. >> real charity. that's our show tonight. >> and now, john stossel. >> what is real charity? some people are in trouble, say after a disaster, or simply when people are poor, americans' instinct is to think, how can government help? after all, who will help those people if not government? we libertarians argue private charity would step in, individuals freely choosing to help. but what enough of us help? most people say no. that's why literals like some columnists say when it comes to helping the needy, that's mostly government's job?

well, listen, it would be great if people all reached into their hearts and solved all these horrible problems we have. but history teaches us that doesn't happen in almost every single case where there is a government program, it exists because the private efforts that you and i both admire weren't enough. >> well, it's because politicians said they weren't enough and we could do better. but i would argue that if government didn't take so much of our money, the private sector would take care of these problems. >> hold on a second. for instance, look at older americans. they used to be the poorest sector of our society. then something called social security came along. and medicare came along and now older people really do comparatively fairly well. before food stamps we had hungry kids spread all across america. those numbers were cut dramatically by that, despite all the generous churches and nice people like the ones who approached you on the street and gave you a nickel. >> these programs are trillions in debt. they're unsustainable. >> maybe we have to tweak them, but you can't throw away the idea. the reality is we need

government in there, too. >> food stamps, a couple billionaires could fund that whole food stamp program by themselves. and a private charity would be better at seeing who really needs the help and who is scamming. >> i'd love that. if you know a billionaire who wants to pay the -- >> they don't step in because your big fat government is there and people say, oh, well, government does that. >> you see, here is the reality in real life is that all these private efforts are really important. we're very generous people. we give a lot of money. but when the chips are down, when the big thing happens, when the typhoon hits the philippines, we love the red cross effort. but you know what? they don't have an aircraft carrier with marines on board and rescue helicopters. the u.s. military does. i want them steaming through the philippines when that typhoon hits. >> i don't know what's going to happen in the philippines. in haiti, our government promised billions of dollars, a billion of it hasn't gotten to

the people. the "new york times" says they were going to build 15,000 homes. latest target, fewer than 3,000. >> if your argument is the government sometimes doesn't do a perfect job -- >> awful, awful. >> i concede that. >> i want to play a longhorn version of that clip i played, two of my left wing colleagues were talking about how after a disaster, faith-based charities were better at disaster relief than fema. >> there is fema and then there is the faith-based fema. if you're waiting for the government, you're going to be in for an awful long wait. >> this is them talking about the government response after the tornado in moore, oklahoma in may. and how 30 churches banded together and helped much more quickly and did a better job than government. this happened in katrina. fema was turning away wal-mart's free water while people were trying get water. and fema was sending its water to the wrong place. >> you're right. as you know, i'm a native of new orleans. so i feel that one kind of personally. you're right, there are some

things the privates do well. they're all the kids, wonderful young people who came down and church groups, they did something much better than government. but they were still an awful lot of things we needed government. remember how angry folks were when fema was slow to get there? they said get here quicker. >> and wal-mart and private charities got there. >> and so maybe one of the things that the privates can do is be a little more nimble, a little quicker. boy, if you're talking about rebuilding the gulf south in america, i don't think you want the government to take a pass. >> i do. let's talk about the war on poverty. lyndon johnson said he would end poverty. so here is where the war began in america, the poverty rate. sure enough, dropped sharply the first five, seven years after that. but then it stopped improving. we taught people government programs teach people to be dependent. and look what was happening before the war on poverty.

americans were lifting themselves out of poverty. government continued the progress for five years and then stopped it. >> we should have been more generous with these programs. we should have done the other things that government can do to help folks. >> oh, gosh. the government doesn't teach dependency? >> no. listen, i am not here saying government is perfect. government has some bad things. it's clumsy and bureaucratic. it has waste and corruption. i'm just saying that there are things it does really well and things the privates do really well and the test is hey, private folks, step up. >> i think these graphs are the test. can we put these up? the rise of food stamp use in america. you would say this is because more people are hungry, the recession. but it goes up steadily. the two lines refer to -- one is the number of people collecting and the other is the cost. we're teaching people to be passive. >> what's the solution?

should we look at those hungry people and say, we're going to take your food stamps away and hope for the best? hope the food pant -- >> we should limit these programs and let the private sector step in. one more example is the rise of disability payments to people. straight up, so you got fewer people doing manual labor, medicine is better. and more people are disabled? >> i got to tell you, i'm with you on that. >> we want to get rid of it? i'll play your own question back. >> i don't want to get rid of it. we can certainly look more closely at some of those applications, cut it way back. >> there is a place near here called a jobs center. government office supposedly to help people find jobs. >> okay. >> i went there, people said, there are no jobs. i looked for jobs. i have to get my welfare here. we went around and within a couple hours, found 40 job offers. 28 entry level positions. one restaurants owner, said i'd hire a dozen people if people would just apply.

how many could come with no experience? >> i'd probably take like nine. probably take nine and train them. >> and at the welfare office, people told us there are no jobs. >> no, there is plenty of jobs. >> these government jobs offices encourage people to take welfare. i had somebody go and ask for help, see if they'd help her get a job and they said no. they'd steer me toward welfare. >> again, it's much smarter to have programs that don't reward laziness. >> they all do that. private charities know who needs the push and who needs help. >> the answer can't be to just cut back. can it? >> yeah. i think. cut it back and invite the private sector in. we'll stop there. ellis, thank you. i say private charity should replace government in this rich country. but what about the rest of the world? people assume global poverty is a problem that has to be

addressed by government giving out foreign aid or maybe the u.n., and the u.n. crickets the title of my book by saying yes, we government, working together can end poverty in just two years. two years! of course, 50 years ago, lyndon johnson claimed his war on poverty would end poverty in america. the u.n. will do better? ted turner gave them a billion dollars for this. individual governments have squandored nearly a trillion dollars in foreign aid trying to lift people out of poverty in africa. i say squandored because after they spent the trillion per capita in africa went down. this may be because the foreign aid encourages dependency and because african governments steal much of the money. but what's the alternative? michael faye says he has an

answer. what's yours? we're going straight to the poor. cash transfers from you directly to them. no middle man, no leakage. no hidden cost. >> so you have a charity and you've raised about $6 million and just given 20 some thousand people cash, about $1,000 each? >> that's exactly right. 1,000 for the household. >> this, to me, sounds like a stupid idea. they'll just spend it and then won't have any. >> you're not the only one. people think we're crazy. the truth is, there has been been a decade of research that shows the opposite. a lot of them are missing the capital. we have the old expression, teach a man to fish, the truth is, in a lot of thieves place, they don't have fishing poles. >> so you allow them to buy a fishing pole or in this case, this may have been a guy who got a motorcycle and he uses it for a taxi service? >> yep. this is a used motorcycle that

they bought with cash and now provides taxi services. >> you give the people a cell phone with the money. why is that? >> that's the way we transfer the money. it's phone to phone. if they don't have a phone, they may not be able to get the money. >> then it's easier to check up on them? >> we check, we call them. we talk to them regularly. >> and people built metal roofs. one of the most popular things. >> one of the most popular. no charity is doing it. the poor decided to do it. saves income, clean water, less malaria. et cetera. we didn't think of it. they did. >> and before they had the metal roof, they had a that thatched . >> they spent $100 a year replacing these things. >> instead, they can start a business. another person had received training from another charity to be a welder. >> yep. he was sitting there doing nothing. sitting doing nothing because he didn't have welding equipment. now he does. >> what makes you think this

works? >> we don't need to think. we've got a decade of evidence. we've done our own third party evaluation of our program. we know income goes up. stress levels go down. hunger falls. and the list goes on. >> you do another odd thing for a charity. none of your charity board members works full time for your charity. why is that? >> here is the great thing. if it's not working, john, i wouldn't need to lie to you right now to keep my job. >> you could be more honest evaluating it when it's not your full-time job. do charities druid themselves? >> i think people have passion and often passion blinds evidence. >> i still have a hard time accepting that this -- i criticize government programs because they don't teach people to take care of themselves. i guess giving cash once and knowing it won't keep coming is different. >> it's one-time transformative and doesn't matter who does it. it matters what they do. why buy a cow when the person is

too old and too sick to take care of the cow? let them make the choice. we shouldn't be making the choice for them. >> i hope it works. i'm glad a loft these experiments are going on. thank you, michael. if you'd like to keep this conversation going, please go to facebook or twitter and use that hash tag there, realcharity. let people know what you think. coming up, president obama says the way to help poor people is to give them a free cell phone. >> a phone is a life line that no one should have to live without. we've been authorized by the u.s. government to offer a free cell phone.

the government will pay for you to have a free cell phone with monthly minutes. no credit check and no deposit required. >> yippy! a free cell phone! 250 free minutes! what deal! this is to help poor people who need life lines. that's reasonable. make a call in an emergency. this is a government program that began when ronald reagan was president. president obama expanded it, of course, and bingo, in just four years, the cost tripled and it will continue to rise 'cause people love their obama phones.

>> you got obama phone? >> yes! everybody in cleveland low minority got obama phone! keep obama president, you know! he gave us a phone! >> how did he give you a phone? >> you sign up, you on social security, you got low income. disability! >> the more free stuff you get, the more you're eligible to get. but eligible, that assumes someone actually checks to see if you're really needy. do they even do that? jillian, a reporter for the national review, was curious, so o? >> i went to all of the welfare offices in manhattan and a couple in brooklyn for good measure and i found out that there are people out there approaching you on the street saying hey, do you have your free phone yet? >> outside the office? >> that's right. and i'm not on welfare. i told them that. i told them i'd like to be on welfare. i think a lot of the people ho pay for it would like to be. that was enough. they ended up giving me not one,

not two. three free phone. >> the good news, is some places turned you down. >> yeah. >> they ended up -- first off, you're not supposed to have duplicate phones, which i've already broken that rule. but they're supposed to check eligibility. i am not eligible. they didn't check that i had multiple applications in and tried to work my way through the system again and again. >> and an fcc audit checked this out. they found 41% of the recipients never demonstrated that they were eligible. >> yeah. that's about 6 million people. but i think what you really see here is the phone companies have a perverse incentive to push as many phones out on the street as they can. they get 9.25 per customer, per month, for this program. the street vendors -- >> it's paid for. we should explain, out of your phone bill, if you bother to read the fine prints a universal service charge. this was under ronald reagan, make sure everybody had a phone line. universal service.

so a buck or two out of everybody's phone bill? >> yes. goes to fund this program. i think that most taxpayers don't know it. before i had gone out and investigated it, i didn't know about it. >> you know what? poor people talk to their families? >> the phone companies are the bad guys in this. track phones, the mexican billionaire, one of the richest people in the world, in 2011 -- >> he may be the richest in the world. >> yeah. he and bill gates compete. goat in 2011 alone, ha a billion dollars from this program. i think you see what turned out to be welfare for the poor, it's actually corporate welfare. plain and simple. >> and what about my obnoxious question? you don't want to help the poor? >> i think maybe there would be justification for a land line and that's what the program started out as. but i think any time that you've got perverse incentives for a company to hand out phones,

combined with poor oversite, you got to ask, are you creating a situation in which fraud and abuse can compound? that's what we have here. >> it shouldn't surprise anyone. government charity is susceptible to fraud. it's no one's money. the more they give out, the more they get to keep. a commission on each give away. the cell phone charity, $2 billion. is that small? think about the hundreds of billions spent on medicare, medicaid. much more fraud there. people who run medical clinics in florida were caught with all this stuff. one man alone spent $20 million on this diamond jewelry. also horses, a fleet of luxury cars, one after the other. all of which he got because government paid millions for medical treatments that never happened. government health is just extra susceptible to abuse. >> that's what i found. i was surprised i was able to get three of them in violation

of pretty much every program rule. if i can do it, being with somebody who tells the truth and not looking to defraud the government, just imagine the people that are actually looking to abuse the program, how great their opportunity is. >> private companies get ripped off, too. but they have more of an incentive to check. it's their own money. >> yeah. that's right. and georgia is actually doing some reforms within the state to try to see if they can mess with that fundamental flawed incentive structure. they're going to start charging $5 for an obama phone. if they have to pay $5, they're less likely to buy three or four different phones that they don't need. >> thank you. coming up, better ways to help people.

one of the richest people in

the world is warren buffet. is he cheap? he's one of many billionaires who until recently, gave very little to charity. he used his money to try to make more money. he said he'd give it away when he died. his fellow billionaire, ted turner, told me, buffet was being cheap! >> he should give some away now. >> turner had just made a big splash by giving a billion dollars to the u.n. and now he said he wanted to shame other rich people into giving more. >> what he said is patently stupid. >> that was businessman t.j. rogers' answer to turner's bragging about his u.n. gift. >> what he should do is take his money and invest it and he can't help people any other better way than to invest it and to have the companies and buildings and plants that are created with the investment, create jobs and products for other people. >> really? is it better if a money maker uses his money to make more rather than give to charity? i think so and threw that question back to ted turner.

if bill gates says look, i'm good at making money -- >> that's ridiculous. >> i tried to argue this with ted turner, but he wasn't buying it. >> am i wrong in thinking that i'm happy if bill gates gives nothing to charity? >> wouldn't you be happier if he did? this is why people don't like newsmen. i'm a newsman, too. i know your dirty tricks! there is nothing more to say. good-bye. i'm walking off. >> since he didn't want to talk about it, let's take that same question to economist ben powell from texas tech. >> i'm not bothered if they don't give more of it away. they make their money by making our lives better, so they are helping people by making a profit. and often that's the best way they can go about helping people. >> and when they make a profit and they hire people, those jobs live on for years and people use it to educate their kids and feed their family. there is a multiplier.

these guys may not even be good at charity. we know they're good at making money. i think they should stickie what their specialty is. >> it's not about their motives, john. it's about the results from it. when they're pursuing profits in the marketplace, it leads them to do the very things that we want them to do to benefit others. of course, the real reason for this is them creating the products and services that make our lives better, but as a by-product, they create jobs that make other people better off. this is often the best way that they can go about making society better. it's what's fundamentally responsible for the high standard of living that we enjoy in this country. >> and yet, most of them, i would say, don't feel good about all the wealth they create in their business and they guiltily give -- talk about giving back. even bill gates, who is now working full time on charities, he's done so much to make our lives better with his company and charity, he says he thinks most charity has to come from government. >> a lot of the money that is supporting these causes coming from the private sector, people

like you and less from governments. >> governments are the backbone of this. >> no, no, no. bill gates has it all wrong. he's good at computers. he's not good at social policy. last week i had a research paper presented in my seminar series about the great chicago fire of 1871. what happened afterward? there was no fema to rush in and botch things. it was civil society organizations that band together and helped get people out of the city who lost homes, who brought in new shelters, brought in clothing judging from what i was hearing, it worked a heck of a lot better than when we get fema in there ordering people where they can and can't go and botching the whole process. >> a recent addition of "forbes" magazine, their richest people list, featured big philanthropy. so they're now rating billionaires by how much they give and kind of warmed my heart. it was great. let's have a competition among rich people on helping others rather than just buying jets and

yachts. >> there is nothing wrong with people giving to causes they think are valuable. some can come from the segment of society. i think it's fine that we recognize that. as long as we don't demonize those who aren't doing it and think there is something wrong with them pursuing their profits because there is not that ultimately make this better off, too. >> there are these tycoons from previous years, like cornelius vanderbilt and john d. rockefeller and people vilify them as robber barons and say well, they did some charity work, but they were evil robbers. >> no, they fundamentally transformed the lives of americans in the 19th century and raised awful our living standards. rockefeller brought us oil and made profits in doing it and by the way, he probably also is responsible for saving the whales because he pushed down the price of oil so much, it was no longhorn profitable to hunt whales to extinction. henry ford comes in and builds automobiles a little later and makes them cheaper for people. it didn't matter that his motive

was profit. the result was that he made automobiles affordable for average middle class americans who had never had an opportunities to do that before. the same is true of most of these so-called robber barons. >> thank you. up next, you ready to freeload? if i put on a fake beard and beg on the street, will people give me money?

it's a foolish policy and it will come to an end the sooner the better. >> that's ron paul talking about the billions we spend on foreign aid. agree with ron paul and hisor song that we should stop all foreign aid. but when libertarians say that, people get angry. >> he wants to cut off american

assistance to niece democratic efforts, just turn your back on it! pull the aid out! what the heck, we give less than 1% of the entire budget of the united states of america! >> actually it's pretty close to 1%. $35 billion. i say we can't afford that. but gregory adams who runs a program says we should spend more. oxfam is a charity that tries to fight poverty all overt world and i say fine, you want to do that, you raise the money, leave governments out of it. well, the issue, john, is that there are some things that charities just can't do. despite the impact that we have around the world and we are very proud of the work that we do with money raised from average americans, there is only so much that we can do with our own projects. there is some places where government needs to step in to do things. >> all right. government needs to make sure aids workers aren't being murdered on the way to where they're going and i should say

that you don't take government money from the united states, so 30% of your money from some other countries. but you call for governments to spend more on foreign aid. why, when so much has been squandored? >> it's important to note, we're calling for more of the right kind of aid. >> yeah. they all say, this is going to be the right kind. >> no, there are some things that we think the united states government is doing that we think are not a good use of money. in particular, food aid is in desperate need of reform. we lose half of the value of every dollar we spend on food aid because we require it to be shipped in american vessels, we're delivering food itself rather than buying food at the stores and supporting local farmers. >> you also want them to spend more. >> well, we want more of the right kind much there is very good programs, things like the millennium challenge corporation that invests in success. it finds the best performing countries, rather than subsidizing failure. we want to see more aid given directly to helping small

farmers grow more of their own food. and we want to see more aid used to support anticorruption efforts and good governance efforts in a lot of these countries. >> what are the odds that that will happen, that the aid supports the corrupt dictators? the "new york times" says as much as half the food aid sent to somalia is diverted to corrupt contractors, islamic militants and local u.n. staff. >> well, somalia is a really difficult environment. >> zimbabwe, handed out food aid to supporters of their leader at a political rally. >> again, when you have bags of food,. >> but by calling for more government aid, you're calling for more of the aid that despite all the promises of reform, has ended up in the hands of corrupt dictators. >> we're not just calling for more government aid.

>> i understand that. you do some great work. but why do you call for it at all? >> there is a lot of misconceptions about u.s. aid. one of the biggest misconceptions is that most u.s. assistance actually goes to government. in fact, that's not true. most u.s. assistance goes to u.s.-based charities, ngo's and contractors. >> and the u.n., which sometimes -- >> there is a portion that goes to the u.n. we're very clear that the u.n. is not the solution to poverty. just as aid is not the solution to poverty. people are the solution to poverty. >> let's hear from an actual african entrepreneur. he runs a business in america now, but she tried operating her business in her home country of senegal. you listen to greg, you agree a combination foreign aid, government would help? >> well, i have a very hard time with foreign aid. the african union itself is admitsing that the $148 billion are being spahn siphoned through

corruption. >> swiss bank accounts? >> fancy real estate in the south of france, the son of a dictator of new guinea, for example, he was busted by french customs. his plane was intercepted and they found in the plane i think it was 27 fancy cars, i don't know how many ferraris, bentslies, rolls royce. >> i would think the only way to stop that is to say, let's keep government out of it. if you can get a bunch of people who want to give their own money, they won't give it to dictators. >> well, not all governments are the same, first of all. and we actually work with a loft anticorruption and human rights activists in countries around the world who are actually working to try to get their governments to govern more accountably. they're actually interested in the u.s. standing with them and joining them. too often we take such an approach to u.s. assistance, we try to make it -- we focus so much on avoiding corruption, these activists are telling us, they actually wants to us stand with them to fight corruption

and that means that we need to be there standing with them in solidarity. >> why do you need government aid? >> why do you need government aid? because governments are the only tool that can work to solve some of these accountability problems. it's like asking why do the bears need an offensive line? at some point you need these other tools. it's going to be he wants entwhistles like her who solve the problem of african poverty. but you also need governments to do other things that entrepreneurs can't do. >> you need these governments, government aid? >> unfortunately, at least in most countries in africa, government has been the problem. they basically stand in my way. as an entrepreneur, government does nothing but slow me down on a regular basis. there are officials bribing me. the fact that my truck gets stopped on a regular basis, making its way from point a to the port, and that i have to pay in time and delay. >> he says government aid will

help fight corruption. >> no. i am sorry. the more you are feeding these huge governments and the more you're choking me on the other end. that is at least the phenomenon. but i am a witness of and i have to live through every day. the more you give to them and the more of that that happens to me. >> we do think there is a role the government can play. in a lot of places that we work, we actually find there is a government deficit because there is a lack of security. there is a lack of basic services. people don't have clean water. people have to deal with -- >> why do you believe government aid would provide that? it hasn't so far after trillions were spent. >> that's actually not true. there's a lot of success stories going on right now in africa. there is a lot of african countries that are seeing huge -- >> i look forward to seeing them. thank you. coming up, why a man came up to me on the street and said, you john stossel? yes. >> i hope you die soon.

someone once came up to me on the street in new york and said, you john stossel? i said yes.

and he said, i hope you die soon. so what was this hatred about? turned out he was what people call an antes poverty lawyer and he did things like suing landlords and stop them from evicting people. in his world here in new york, capitalism, which i'm for, is the enemy and the only thing that keeps poor people from being totally oppressed is government. so because i call for less government, i'm evil. this town, we libertarians are selfish people who don't care about anyone else, especially the poor. and the good guys are called bleeding heart liberals. so what's this web site about? bleeding heart libertarians. it talks about social justice and free market. georgetown university philosophy for, regularly contributes to the site. why? what's this about? >> so the idea behind bleeding heart libertarians is recapture what was ultimately the soul of letter tearianism.

when i think libertarians can and should do is embrace social justice. the idea that if we're going to advocate property -- >> what's the phrase even mean? i'm so annoyed on campuses, i'm for social justice, like if you're not on their side, you're for social injustice? >> right. you know, for a lot of people, it doesn't mean anything. it just means socialism. for many people there is a real meaning. that is that if you're going to have coercive institutions that you expect other people to live by. >> government? >> laws, property rights, family rules, anything like that, one of the tests of those institutions should be that you expect when people live by them, abide by them, you'll tend to produce good consequence for everybody. not just for some. so i think you can show whether you care about this as a libertarian by asking a question like this: imagine marxists were right about markets. imagine they were a disaster. imagine they left the overwhelming majority of people destitute. would you still advocate markets or have reservation about it?

most libertarians would say i would at least have reservation attention. the fact markets work. >> now, i and rand said, die not consider charity a major virtue or moral duty. and that's been a big point, he's called selfish. >> what she means isn't what most people mean. i don't think she speaks for most people. they give to charity. they care that markets work and that they work for everybody. so the minimum wage. if you didn't think it mattered, that it hurt the poor, why would you argue it causes unemployment? you would just say, the minimum wage interferes with economic freedom and that's that. but you don't. you say the minimum wage causes unemployment among the most vulnerable people in society and that's part of the reason to oppose it. that means that you care about the consequences for the poor. >> on the web site, bleeding heart libertarian, categories like advocating versus caring, versus helping. >> yeah. i think this explains what's

going on with people when they think that libertarians are selfish. if you're on the left, you probably believe that your policies are the only sensible expression of benevolence and so you probably think if libertarians disagree with your policies, they must only care about their pocket books. that doesn't make sense. one, because we have real arguments about why we think that policies don't work. if i advocate we have 90% marginal tax rate, if i advocate that, that doesn't cost me anything. if i give money to charity and -- >> the left does. government should have a bigger antipoverty program. >> right. that cost you nothing. but you get the warm glow of altruism when you say you advocate that. genuine caring, you know when you care when you put your money where your mouth is. 'cause it actually costs you something. if you're giving 10% of your income away, i know you're concerned. if you're just advocating taking 10% of income away from other people and that's all you do, you're not really showing me you really care. >> it's easy to be generous with other people's money.

>> yeah. that's what politicians do. >> that's right. thank you. coming up, my take on real charity.

when it comes to charity, i used to be pretty cheap. my mom told me, you don't save your money, you'll freeze in the dark. so i saved.

but when my career took off and i started getting paid money to make speeches, i decided to donate that money to charity and it changed my life. i realized i like giving money away. makes me happy. and research on what makes people happy backs that up. on average, people who give to charity, whether they give in money or just time, they're happier. so give! it's good for us and good for them. though that depends who you give to. >> you ready to freeload? >> i put on a fake beard and tried begging in new york city. people gave me money. they gave me money when my cardboard sign said homeless and cold. and they even gave when i changed it to, need a beer. >> thank you. >> thank you. >> when we asked givers why they gave, people said things like this. >> that guy looked pretty needy. >> i just begged for an hour,

but i did well. if i did this for an eight-hour day, i would have made 90 bucks. 23,000 for a year, tax free. that's the reason social workers say don't give to beggars. often it's a scam and very often you're an enabler. by giving cash, you subsidize the beggar's drug or alcohol habit. by not giving, you may encourage them to get real help. a few respectable charities solicited on the streets, like the people who collect for the salvation army before christmas, but most who beg in public are running scams. >> i need your help! i am homeless. will you help me out? >> new york's attorney general said this pitch from a group calling itself united homeless, is a scam. its director keeps nearly all the money. spends it on things like his weight watcher bill. >> how is it a scam? >> i hear you keep most of the money. >> we're homeless people. we work the tables. correct? >> but the pitch is it's going to shelters.

>> no, that's not true. >> do you have bills? what, are you supposed to run a nonprofit organization and not get money? >> all the people donating, absolutely know where is that money goes. >> it's hard to find out where your charity money really goes. we can check charity rating services like charity navigator. better than nothing. but the ratings aren't perfect. some charities aren't rated and rating services, they sometimes get conned, too. so i give my charity money to groups that i can check out myself, like the dough fund. a group that rehabs ex-cons and addicts. i decided they do a good job because i could see these men. they call them men in blue, ready, willing and able. they clean up new york city streets and what was odd is that they do it with spring in their step. they look cheerful and work pretty fast. i thought whoever is working with these guys has done something right. taught them to take pride in work. so i give them money.

and a couple other groups that i can watch. but while i give o what i think are good charities, we shouldn't forget that the people who do the most for the poor are capitalists. honest ones. not the ones who feed off government. but job creators do much more good for the world than politicians. and more even than the do gooders working for charity. i'm delighted the singer bono figured that out after spending years calling for governments to spend more on foreign aid. now he says, the best hope for the poor, free market. >> wow. sometimes i hear myself and i just can't believe it. commerce is real. aid is just a stop-gap. commerce, entrepreneurial capitalism takes more people out of poverty than aid, of course we know that. >> politicians don't know that. many americans don't know it. it's time they learn. bono is right. entrepreneurial capitalism takes

more people out of poverty than aid everywhere. that's our show. see you next week. hello, everyone. i'm arthel neville. welcome to a brand-new hour inside america's news headquarters. >> i'm gregg jarrett. glad you're with us. topping the news this hour, pushing for an agreement on iran's nuclear program and diplomats try to close the gaps at the midnight hour. we're going to have a live report on the marathon negotiations. also a new day, a new problem for obamacare. we'll tell you how it's slashing the paycheck for doctors and how this could affect the medical care you receive. plus, panic at lax on a very