>> it's the season of giving, where should you give? should you give this man money? what about this man? thank you. actually that's me. don't give money to be beggars e me. but does government really help the poor? >> everybody in cleveland -- >> 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 than aid.

>> even some in the mainstream media. >> if you are waiting for the government you will be in for a long wait. if they get it maybe soon more people will realize there are better ways to give. >> there you go. beautiful. >> real caring that. -- that's our show tonight. >> now, john stossel! >> what is real charity? when 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 the people if not government. we libertarians argue that private charity would step in. individuals freely choosing to help. would enough of us help. most people say no. that's why, 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. history teaches us that doesn't happen. in almost every case where there is a government program it exists because the private efforts that you and i both admire weren't enough. >> well, because politicians said they weren't enough. and we could do better. but i would argue if government didn't take so much of our money the private sector would take care of these problems. >> who was it, john? for instance, older americans, right. used to be the poorest sector of our society. then social security, and medicare came along. now all the people do comparatively fairly well. before food stamps we had hungry kids spread across america. numbers were cut by that. despite all the generous churches and people like the ones who approached you on the street and gave you a nickel. >> the programs are trillions in debt. they're unsustainable.

off awe may >> maybe we have to tweak them. you can't throw away the reality. >> food stamps. a couple billionaires could fund the program by themselves. private charity would be better sag who needs food help and who is scamming the system. >> if you know a billionaire who wants to pay the expense. we would welcome that. they don't step in. big fat government is there. people say "government does that." >> here is the reality in real life. all the private efforts are really important. we are generous people. when the chips are down. when the typhoon hits the fill weans, -- hits the fill weans. we love the effort. we don't have a aircraft carrier. the u.s. military does. i want them steaming toward the philippines when the typhoon hits. >> i don't know what will happen in the philippines. in haiti our government promised

billions of dollars, a billion has then't gotten to the people in haty. "the new york times" says they were going to build 15,000 homes. latest tar iget, fewer than 30,000. >> i concede that. >> i want to play a longer version of the clip i showed earlier. two left wing colleagues were talking 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 are waiting for the government, you are going to be in for an awful long wait. >> soap this is harry smith, brian williams talking about the government response after the tornado in moore, oklahoma, in may. how 30 churches banded together and helped much more quickly and did a better job than government. this happened at katrina too, fema was turning away wal-mart's free water wheel people were trying to get water. fema was sending water to the wrong place. >> you are right.

i am a native of new orleans. i feel that one personally. you are right. some things the prifvates, kids. church groups, did some things much better than government. there was still an awful lot of things we needed government for. remember how angry folks were when fema was slow to get there. no one said stay away. they said get here quicker. >> wal-mart. private charities got there quicker. >> one thing the prifts can do. be nimble. quicker. talking about rebuilding the gulf south in america. don't think you want government off to take a pass. >> i do. let's talk about the war on pocher tepoch poch -- on poverty. lyndon johnson said he would end poverty. sure enough, dropped sharply, first, 5, 7 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 pocher t pove. americans were lifting themselves out of poverty. government continued the progress for five years and stopped it. >> we should have been more generous of programs. we should have didn't other things government can do to help folks. >> oh, gosh. you want to give up? >> government doesn't teach dependency. >> listen, i am not here saying government is perfect. government has bad things, it is -- i am saying there are things it does really well and things the privates do really well. the test is hey, private folks step up. >> i think these graphs are the test. look, can we put these up. rise of food stamp use in america. you would say this is because more people are hung rechlt try. the recession. it goes up steadily. two lines refer to one as the number of people collecting. the other is the cost. we are teaching people to be

passive. >> i grant you that is something we want to avoid. so what is the solution. should we look at the hungry people sand sand say we will tar food stamps away. >> limit programs. let the private sector step in. one more example, rise of disabidis disability payments to people. mr. people doing manual labor, medicine is better. more people are disabled. >> i'm with you on that. >> want to get rid of it? >> no, i don't want to get rid of it. i think we could look more closely at applications. >> cut it way back. there is a place near here called a job center. government office, supposedly to help people find jobs. i went there. people said there are no jobs. i have looked for jobs. i have to get my welfare here. >> we went around. 40 job offers. 28 entry level positions.

one restaurant owner said i would hire a dozen people if people would apply. >> i would probably take like nine, probably take nine and train them. >> at the welfare office people told us there ano jobs. >> there are plenty of jobs. >> these government jobs offices encourage people to take welfare. i had somebody go and ask for help. see if they would help her get a job. no, they steered me towards well fare, food stamps. >> again, much smarter to have programs that encourage people to work. that don't reward laziness. >> they all do that. >> i don't know. >> private charities know who needs a push and who needs help. >> the answer can't be to cut it back can it? >> yeah. i think. cut it back. and invite the private sector in. we'll stop there. thank you. now i say private chair thee should replace government in this rich country. what about the rest of the

world? people assume global poverty is a problem has to be addressed by governments giving out foreign aid. maybe the u.n. and the u.n. contradicts the title of my book by saying, yes, we governments, working together can end poverty in just two years. >> wow, two years. of course, 50 years ago, lyndon johnson claimed his war on peevpeeve poverty in america. the u.n. will do better. ted turner game them $1 billion for this. individual governments have squandered a trillion in foreign aid trying to lift people out of poverty in africa. after they spent the trillion, per cap tain come in africa went down. this is maybe because the foreign aid encourages dependency and, african

clepto-crat governments steal the money. what's the alternative. michael fey has an answer. what is yours? >> going straight to the poor. cash transfreers from you to th. no middle man, leakage or hidden cost. >> you have a charity. you raised $6 million. and just given 20,000 people cash, about $1,000 each? >> exactly right. $1,000 for the household. >> this to me sound like a stupid idea. they will spend it. then they went have it. >> you are not the only one. people think we are crazy. truth is there has been a decade of research shows the opposite. what are the people missing? a lot of them are missing the capital. we have the old expression, teach a man to fish. the truth iss ethey 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 uses it for a

taxi service? >> yep. use mod motorcycle he bought wi cash and provides taxi services. >> you give the people a cell phone with the money. >> that any the way we transfer money. phone off to phone. if they've dent haton't have a they may not get the money. >> easier to check up. >> check, call them. talk to them regularly. >> people built metal roofs. one of the most popular things. >> one of the most popular. no charity doing it. the poor decided to do it. saves income. clean walter. less malaria. we didn't think of it. they did. >> beaver they had the metal roof they had a thatched roof and spent. >> burns down. falls. spend $100 a year replacing these things. >> soif instead they can start a business. another person receiveded training to be a welder. awe off sitting doing nothing

because he didn't have welding equipment now. heap does. >> what makes you think this works? income goes up. stress levels. hunger follows. 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 is not working, john, i wouldn't need to lie to you right now to keep my job. >> you could be honest evaluating it when it is not your full time job. off off exactly right. >> charities delude themselves. off awe people have passion. often passion blinds evidence. >> well, i still -- have a hard time accepting. i just kricriticized government programs because they don't teach people to take care of themselves. i would think. giving cash once, knowing it won't keep coming. is different. >> one time transformative.

doesn't matter who does it. it matters what they do. why buy a cow when the person is too old and too sick. let them make the choice. we shouldn't be making the choice for them. >> i hope that works on, glad a lot of these experiments are going on. thank you, mike cam. if you would look to keep the conversation going, please go to facebook, twimenter, use that #realcharity. >> president obama says the way to help poor people is to give them a free cell phone. >> of a phone is a lifeline that no one should have to live without. >> reach out wireless has been authorized by the u.s. government to offer a free cell phone. [ male announcer ] when mr. clean realized the way to handle

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♪ >> the government will pay for you to have a free cel >> the government will pay for you to have a free skrel phocel. >> yipee, a free cell phone. 250 free minutes. what a deal. this is to help poor people who need a life line. make a call in an emergency. a government program began when reagan was president. president obama expanded it. of course in bingo, in four

years the cost tripled and will continue to rise. because people love their obama phones. >> you have an obama phone? >> everybody in cleveland, minority, has an obama phone. he gave us a phone. >> how did he give you a phone? >> you are on social security, you got low income, you disability. >> the more free stuff you get the more you are eligible to get. but eligible, that, that assumes some one actually check to see if you are really needy? do they do that? jillian melcher for "national review" was curious. what did you do? >> i went to all welfare offices in manhattan, couple in brooklyn, and i found out there are people out there approaching you on the street saying, do you have your free phone yet? >> outside the office. private entrepreneur. >> right i'm not on welfare. i told them that. i told them i would look to be on welfare. i think a lot that pay for it

would look to be. that was enough. theyened up not giving me one, two, three, free phones. >> good news, some places turned you down. they did check. >> they ended up catching, well first of awe you are not supposed to have duplicate phones. i broke the rule. they are supposed to check eligibili eligibility. they've didn't catch i had multiple applications in tried to work my way through again and again. >> an fcc audit checked this out. they found 41% of the recipients never demonstrated that they were eligible. >> 6 million people. i think what you really see here is the phone companies have ape perverse incentive to push as many phones on the street. they get $9.25 per customer per month for this program. >> paid for we should explain out of your phone bill. if you bother to read the fine print. something called a universal service charge. and this was under ronald

reagan. make sure everybody had a phone line. universal service. so, $1 or $2 out of everybody's phone bill. >> goes to fund the program. i think most taxpayers don't know it. before i had gone out and investigated this, i didn't know what that knee was at the bottom of the phone bill. >> you want people poor people to talk to their families. >> the phone companies. this is a huge business. track phone, owned by carlos slim, the mexican billionaire. one of the richest people in the world. >> he may be the richest in the world. >> yeah, he and bill gates compete. he got in 2011 alone, $500 million from the program. you've see what has turned out to be welfare for the poor. it is actually corporate welfare. plain and simple. >> what about my obnoxious question -- you don't want to help the poor? >> i think maybe, a land line. that's what the program.

any time you have perverse incentives for a company to hand out phones and poor oversight. are you creating a situation in which fraud and abuse can compound. that's what we have here. >> shouldn't surprise any body. it is susceptible to fraud. contractors doing the work know. government's money. no one's money. the more they give out. they get to keep. >> $23 billio-- $2 billion. there is much more fraud there, people who run, medical clinics in florida. 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. government paid millions for medical treatment that never happened. government help is just extra susceptible to abuse. >> that's definitely what i

found. i was surprised i was able to get three of them. in violation of pretty much every, every program rule. if i can do it, being somebody who tells the truth not looking to defraud the government. look at people who are looking, how great their opportunities are. >> private companies get ripped off. they have more in send tich off to check. their own money. >> that's right. georgia is doing reforms within the state. to try to see if they can mess with the flawed incentive structure. and start charging $5 for consumers for an obama phone. if they have to pay for it. they are less likely to get, three, four, different that they don't need. >>jillian. better ways to help people! ♪

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♪ john: one of the richest people in the world is warren >> one of the richest in the world is warren buffett. is he cheap? he is one of man many billionaires who gave little to charity. he made money to make more money. his fellow billionaire, ted turner told me buffet was giving cheap. >> he should give some away now. >> turner made a splash giving $1 billion to the u.n. now he said he wanted to shame other rich people into giving more. >> what he said is patent tee stupid. >> that was t.j. rodgers answer to turner's bragging abut his u.n. gift. >> what she should do is take money invest it. he can't help people any other way than to invest it. have companies, buildings, created. create jobs, wealth, products for other people. >> of really snitz it better if of a moneymaker uses money to make more rather than give to

charity? i the think so. i threw that question back to ted turner. >> if bill gates says look i am good at making money. >> that's ridiculous. >> i tried to argue this with tud tu ted turner. he wasn't buying it. am i wrong if bill gates gives nothing to charity. off awe wouldn >> this is why people don't like newsmen. i am a newsman too. i know your dirty tricks. there is nothing more to say. good-bye, i am walking off the set. >> since he didn't want to talk about it. let's take the question to ben powell, he runs the free market institute at texas tech. so, ben? >> i'm not bothered if they don't give more of it away. they make money by making our lives belter. they are helping people making a profit. often the best way they can go about helping people. >> when they make a profit, and they hire people, those jobs live on -- for years. and people use the it to --

educate their kids. and feed their families. there is a multiplier. these guys may not be good at charity. we know they're good at making money. stick to what their specialty is. >> it's not about their motives, john. about the results from it. when they're pursuing profits. it leads them to dupe the things we want them to dupe to benefit others. now the real reason is them creating products and services that make our lives better. as a byproduct they create jobs. this is the best way they can go about making society better. what is fundamentally response bum for t able for the high standard of living in this country. >> most of them i would say don't feel good about the wealth they create in their business. they guiltily give charity, talk about giving back. even bill gates now working full time on charity, done so much to make our lives belter witter wi company and charity. he says he thinks most charity has to come from government

>> a lot of money supporting the causes is coming from the private sector. people like you and less from government: >> no, governments are the backbone of this. >> no, no. >> bill gates has it all wrong. he is good at computers not good at social policy. just last week i had a research paper presented in my seminar, about the great chicago fire of 1871. what happened afterwards. no fema to rush in. it was private charity. civil society organizations banded together and helped get people out of city who lost their homes. brought in shelter, brought in clothing. judging from what i was hearingen the hearing in the research. worked better than fema. botching the whole process. >> recent edition of forbes magazine, their richest people list, features big philanthropy. so, they're now -- rating billionaires by how much they give. kind of warmed my heart.

great, have a competition among absurdly rich people helping others rather than buying jets and yachts. >> there its nothing wrong with people giving money to causes they think are valuable. not every good or service is produce ford profit. some can come from the segment of society. i think it is fine we recognize that as long as we don't think there is something wrong with them pursuing profits because there is not. that makes us better off too. >> there are these tycoons from previous years, vanderbilt, rockefeller, and people vilify them as robber barons say they did some charity work. but they were evil robbers. >> no they transformed the lives of americans in the 19th century. raised our living standards. rockefeller brought oil and made profits in doing it. by the way he probably also is responsible for saving the whales. he pushed down the price of oil it was no longer profitable to

hunt whales. henry ford builds automobiles. didn't matter his motives was profits. the result. he made automobiles, affordable for middle-class americans who that before. the same is true of most of them. >> thank you, ben powell. up next -- >> red to freeloady to freeload. >> if i put on a fake beard and beg on the street. will people give me money? just by talking to a helmet.

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♪ john: it will come to an it is a foolish policy. it will come to an end, the sooner the better. >> that's ron paul. talking about the billions we spend on foreign aid. much of which is squandered or stolen, so, i agree with ron paul. and his son, the senator. we should stop almost all foreign aid.

when libertarians say that, people get angry. >> he wants to cut off american assistance, to these nacient efforts. pull the aid out. we give less than 1% of the budget of the united states of america. >> actually pretty close to 1%. $35 billion. i say we can't afford that. but gregory adams who runs oxfame aid effectiveness program says we should spend more. oxfama. charity that tries to fight poverty all over the world. fine, you want to do that. you raise the money. leave governments out of it. >> well the issue john is there are some things, charities just can't do. despite the impact that oxfam has around the world. we are 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 arntd

beiarntd -- aren't being murdered on the way to where they're going. you've don't take government money from the united states. though, 30% of your money from some other countries. but you call for governments to spend more on foreign aid. and -- why when so much has been squandered? >> it is important to note we are calling for more of the right kind of aid. >> yeah, this is going to be the right kind this time. >> there are some things we think the united states government is doing that we think are not a good use of money. in particular, food aid. in desperate need of reform. we lose half of the value of every dollar that we spend on food aid. we require title be shipped in american vessels, delivering food itself. rather than biffi ibuying food source and supporting farmers. >> you want them to spend more? >> more of the right kind. the millennium challenge corporation that invests in success. finds the best performing countries rather than

subsidizing failure. we want to seep aid given to small farmers to grow more food. we want more aid used sue support, good governance efforts in the countries. >> what are the odds that will happen. that the aid supports the corrupt dictator thousands. "the new york times" says half of the food aid sent to somalia is diverted to corrupt contractors, militants and staff. >> somalia is a dif kuflt cficu environment. >> this is one of the problems when the only tool you have is bags of food. but by calling for more government aid, you are calling for more of the aid that despite all the promises of reformer,

has ended up in the hands of corrupt dictators. >> we are not just calling for more government aid. >> i understand. you do some great work. why do you call for it at all. >> one of the biggest misconceptions is that most u.s. assistance goes to governments. in fact not true. most u.s. assistance goes to u.s. based charities, ngos, contractors. >> the u.n. which -- some times. >> there is a portion that goes to the u.n. we are clear that the u.n. its not the solution to pocher tee. just as the aid is not the solution to proverty. >> let's hear from an african entrepreneur. he runs a business in america. but, she, she tried operating her business in her home country of senegal. listen to greg, you agree. combination, foreign aid, government, would help. >> i have a hard time with foreign aid. african union itself is admitting that $148 billion are

being siphoned through corruption every year. >> swiss bank accounts. fancy real estate in the south of flanrance the son of the dictator was busted by french custom thousands. his plane was intercepted. they found in the plane, i think 27 fancy cars, ferraris, bentleys, rolls royces. >> of the only way to stop that is to say let's keep governments out of it. if you can get people who want to give their own money. they won't give it to dictators. >> not all governments are the same first of all. we actually work with anti-corruption 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 this fight. too often we take such an approach to u.s. assistance. try to make it. focus so much on avoidi ining

corruption. the activists want us to stand with them to fight corruption. that means that we need to be there standing with them in solidarity. working together. >> why do you need government aid? >> why do you need government aid? >> governments the only tool that can work to solve some of the accountability problems. like asking why dupe to the bea need an offensive line. linemen don't score touchdowns. at some point, you need tools. solving the problem of african poverty. you neat them to do thing that entrepreneurs can't do. >> you need government, government aid? >> in most countries in have riff ka. government has been the problem. as an entrepreneur. government does nothing but slow me down on a regular basis. their officials, bribing me all along, the fact that my snuck, gets topped. point a to the port.

i have to fay. the delays. he says government aid will help fight the corruption. >> no, the more you are feeding the huge government. the more you are choking me on the other end. that is at least the phenomenon. weakness of. and i have to live through every day. the more you give to them. and mort that's what happens to me on the ground. >> greg? >> we do think there is a role the government can play. in fact in a lot of places that ox-fam works, a government deficit. a lack of stewart. a lack of services. people don't have clean walter. people have to deem with -- >> why do you believe government aid would provide that. it hasn't after trillions were spent. >> that's not true. hey lot of success stories going on in africa. have riff c african countries -- >> thank you. why a man came up to me on the street and said are you john

stossel. yes. i hope you die soon. ♪ i wanna spreaa little love this year ♪ [ male announcer ] this december, experience the gift of true artistry and some of the best offer of the year at the lexus december to remember les event. this is the pursuit of perfection.

♪ john: someone once came up to me on the street in new

>> some one once came up to me on the street in new york and said, are you john stossel? i said, yes. he said, i hope you die soon. so, what was this hatred about? turned out he was what people call an anti-poverty lawyer. he did things like suing landlord to stop them from evicting people. and in his world, here in new york, capitalism which i am for is the enemy. the only thing that keeps poor people from being totally oppressed is government. so, because i called for less government, i am evil. and this town we libertarians are selfer people who don't care about any one else, especially the poor. and the good guys are called bleeding heart liberals. so, what's this website about? bleeding heart libertarians. talks about social justice and free market. georgetown university philosophy professor, regularly contribute to the site. why, what is this about? >> the idea behind bleeding

heart libertarians was to recapture the soul of libertarianism. what lyer te the idea that if we are going to advocate property rights. >> what's the phrase mean? so annoyed on campusize am for social justice. like if you are not on their side you are for social injustice? >> right. for a lot of people it doesn't mean anything. it means socialism. for many people there is a real meaning. that is that if you are going to have coercive institutions you expect other people to live by. >> government. laws. >> laws, property rights. family rules. anything like that. one of the tests of the institutions should be that you expect when people live by them and abide by them they will produce good consequences for everybody not just for some. i think you can snow whether you care about this as the a libertarian asking, imagine markists were right about markets. what if they left people

destitute would you add voep kate markets. or have roeservation. the fact that it matters, and justification, if you think that, you advocate, what philosophers are calling social justice. >> aynrand is called selfish. >> what she means by selfishness isn't what most people what sh isn't what most people mean. if you didn't think it mattered that it hurt the poor, why would it matter. you say the minimum wage for unemployment and that's part of the way to oppose it. >> categories like advocating versus caring versus helping.

>> i think this explains what's going on with people when they think that libertarians are selfish. if you're a left you probably believe that your policies are the only expression and you probably think if libertarians disagree with your policy then they must disagree with your value. we have real arguments as to why we think they policies don't work and advocacy is cheap. if i give money to charity -- >> government should have a bigger anti-poverty. genuine caring you know when put your money where your mouth is because it costs you something. if you're giving 10% of your income away i know you're concerned. if your advocating taking away 10% from people and that's all you do, you're not really showing me you care.

>> it's easy to be generous with other people's money. 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 if you don't save

your money you'll freeze in the dark, so i saved. when my career took off and i got 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. research on what makes people happy, 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. that depends whom you give to. >> i put on fake beard and tried begging in new york city. >> can you help me? >> they gave me money. they gave me money when my sign said homeless and cold and they even gave when i said need a beer. >> thank you. >> when we asked givers why they gave people said things like this. >> he looked pretty needy.

>> i just begged for an hour, but i did well. if i did this for an 8-hour day, i would have made 90 bucks. 23 thou for a year, fax frtax f. that's the reason they say don't give to beggars. often it's a scam and you're an enabler. by not giving you may encourage them to get really help. a few respectable charities sol solicit on the street like the people for the salvation army and most who beg in public are running scam. >> i need your help. i'm homeless, will you help me out today. >> new york attorney general said this pitch from the group calling themselves united homeless. the director keeps nearly all the money spends it on thing like his weight watcher bill. >> i hear you keep most of the money. >> we're homeless people that work the cables.

>> the pitch is it's going to shelters. >> the direct r hor has bills. you supposed to run a non-profit organization and get no money. >> it's hard to find out where your charity money really goes. we can check charity rating services like charity navigator. it's better than nothing, but the ratings aren't perfect. some aren't rated and rating services sometimes get conned too. i give my charity money to groups i can check out myself like the doe fun. 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. what was odd is 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. while i give to what i think are good charity, we shouldn't forget the people who are most of the poor are capitalists. job creators do much more good for the world than politicians and more than the do gooders working for charity. i'm delight that the singer bono figured that out calling for the government to spend more in foreign aid. now the best hope for the poor is free market. >> sometimes i hear myself and i just can't believe it. commerce is real. >> politicians don't know that. many americans don't know it. it's time they learned.

bono is right. entrepreneurial capitalism takes more people out of capitalism than aid ever will. that's our show. see you next week. tonight on huckabee. a failed obama carroll out and a broken promise that you can keep your daughter cost the president the public's trust and candid in his lowest approval ratings of his presidency. does bad news tr the president mean good news for republicans? last minute changes are making insurance companies scramble to accommodate the president an his health care law. what surprises still lie ahead. plus, the catholic church wins a big court vic