the news continues, have a great night. it is a bat for the future of america. >> you work for us! >> a battle between those who say we need less government. and those who actually --

>> the government is us. >> it costs to live in a civilized society and we all need to pay our fair share. >> wait a second. >> how do you give a rebate to people who didn't put any bait in. >> today there's a battle between the takers and makers. >> it is a battle because the government is threatening to take us from a maker nation to -- >> the private sector is dying. and the federal government is providing more and more pay and benefits. >> union thugs are suggesting the life out of america. >> that's an absurd statement c your going to end up with people that don't produce. that's the spiral, that's the end. >> some say america's wealth is like the pot. are you getting your fair share? makers make more pots for profit. good news, profit got this town a better deal. >> what difference does it make if the company is making a profit but you are getting a

service that costs you less. >> wish they tried that where i live. maybe then i wouldn't get taxed every making moment. >> so many taxes. i need a drink! >> announcer: reporting from fox headquarters in new york, john stossel. john: where is america heading? the political left and right have two different visions for our future. the left wants more government. the right says, we should have less. you her the cries about -- bell, california, managers paid themselves hundreds of thousands of dollars. >> shame on you. >> you are a crook yesterday, you are a crook today and you will be a crook tomorrow. john: maybe, they were arrested. >> they used the tax dollars collected from the hardworking citizens of bell as their own piggy bank. john: much of what they did

was what lots of politicians do vote to spend taxpayer money on what they think is important, themselves. >> they want to do whatever the hell they want. john: exactly. everyday politicians spend your tax dollars on their vision of what america should have. that's what some tea partiers are angry go about. in this case they are yelling kill the health care bill. congress didn't kill it. >> the bill is passed. john: passed with the serve america act. and wall street reform. plus foreclosure relief. and children's health insurance. and extended unemployment. of course the stimulus. they always spend more. thomas jefferson said it is the natural progress of things for liberty to yield and government to gain ground. but never before outside wartime has government gained so much ground. >> just got to stop spending.

john: for most of the life of america when we grew the fastest government spent in today's dollars just a few hundred dollars per person. today, the federal government alone spends $10,000 per american. total government now eats up 40% of the economy. 40%! the political class always claims they need more. >> many people are hurting. >> help america's steelworkers. >> tax funding for black farmers >> i average 20 to 30 meetings a day people asking for something from the federal government. john: paul ryan believes government should do less. you are telling your colleagues stay out, don't do anything? >> yeah. in many of these cases, yes. john: that's not a popular idea around here. congress listens to testimony all day, 99% comes from people asking for stuff. >> i propose congress pass

legislation. >> i propose that congress. john: there's a reason people show up and beg. >> it does work and it does payoff. john: people who are connected gets the goodies? >> that's right. john: most people like getting free stuff. >> yeah. i think more people are beginning to wake unto the fact this is becoming unglued. john: when the health care bill was close to passage ryan took on the president directly. >> this bill does not control cost. this bill does not reduce deficits. >> there's strong disagreement on the numbers. >> they smiled, shook hands but nowhere close to agreeing. why are your colleagues saying it is okay to spend more? are you saying they are stupid, they don't care pandering for votes? >> pandering could be part of it. i think they believe the government should be far larger and far bigger. >> stop spending so much! >> that's something you should

tell the republicans, john. >> democratic congressman andrews is a friend of paul ryan. he says, don't blame us. >> president reagan and both president bushes spent more than either president clinton or president obama to assign responsibility to the democrats for this problem is not factually accurate. >> it is true in the past government has grown just as much, sometime more under republicans. these days it is the democrats who are most eager to spend. you ever think government is doing too much? >> this is what built the country. this is the declaration of independence and the constitution. john: pretty thin. limited government. you guys have gone way beyond this. >> i don't that i a social security system is excessive government. i don't think that a medicare system is -- excessive government. i don't think the student loan

system is excessive government. >> we have to make sure the most vulnerable are always protected. john: protected by a big government the progressives' argument. professor hill makes their case better than most. >> we have suffering everywhere. john: he's giving a commencement address in california. >> poor people, rich people, black, white, everyone has to be involved in the struggle. with those of us at the top of the economic ladder have to be willing to make sacrifices that will benefit everyone. everyone benefits when we pay a little more to universal health care, education systems. john: by we you mean government? >> we talk about government like it is a monster on the hill, we are the government. the government is us. john: the government is us? in your ideal world what percent of the economy should

government be? >> housing, education, national defense the government must provide. if that means 20%, i'm okay. 30% i'm okay. i don't think it will get that big. john: it is already at 40%. here's the graph of the growth of government, it was tiny, less than 5%. >> much of that has to do with inefficiency and waste. john: but you won't more. >> i don't want more inefficiency and waste. it is not big enough now. john: really? it is awfully big. so big we are now 13 trillion in debt. yet, they keep spending more. >> there you go. there you go. john: how will we pay for it? we fight most about the income tax. >> raising taxes is a recipe for disaster. john there are so many other taxes.

payroll, corporate, capital gains, estate, sales taxes. equal to the income tax are dozens of sneaky taxes you may not know about. you and i pay them all day long. from the moment i wake up and turn on a light. i pay more when i brush my teeth. license my dog. my building pays property and fuel taxes added to my monthly bill. when i take the subway to work, i pay the metropolitan ter transportation mobility tax. at work i make calls. get eight bite to eat, soda to drink. -- get a bite to eat, ski to drink. as much of a quarter of the price of the gas is federal, state and city excise tax. people pay sales taxes all day long. so many taxes. i need a drink. i'm lucky i don't smoke.

yet, some people say we should pay more. all those taxes are just fine, say progressives. >> it costs to live in a civilized society. we all need to pay our fair share. john: progressives say taking from the rich to help the poor is the fairest system. >> no. the fairest system is the one that rewards the makers in society as opposed to rewarding the takers in society. >> reporter: arthur brooks wrote the battle which argues a fight between free enterprise and big government will shape our future. >> our culture is moving towards more redistribution, more taxation, loading more taxes on to the top earners in our society. john: but i'm wealthy it is kind to take it from me and give people who need it more. >> actually, it is not. the government does not create wealth, it uses wealth that has been created by the private sector.

americans are in open rebellion today, because the government is threatening to take us from a maker nation into taker nation status. john: a taker nation? there are plenty of takers.

john: some people say you are a maker or a taker. today the makers and takers are battling for america's soul. it is a battle because we are deciding on our culture. 60% of americans take more out of public's finance system then they pay in. they get more out of services than they pay intacts. >> how do you give a rebate to people who didn't put any bait in. >> there are makers and there are takers. john: star parker was a taker. she lived off welfare for seven years. she says the welfare bureaucracy encouraged her to stay dependent.

>> they made sure you didn't work, save or get phraerd. john: if you didn't work, save or marry you got a check --? >> right, two checks, 1st and the 15th. food stamps and all your medical spends and daycare for kids so i could hang out at venice beach all afternoon. john: so she did. the creators of welfare meant to help people. hand-outs have unintended consequences. >> once i found out about welfare, why work when i could hang out here.vi john: even if welfare encouraged dependency, progressives say, other programs don't. >> we have public housing. we have all sorts of things that are designed not to give people a hand-out but to give people a fighting chance. john: a fighting chance? so many people vandalize their public housing projects that governments end up destroying them. again and again.

they build it, it wrecks neighborhood,. then they blow it up. >> government housing doesn't wreck neighborhood,. unattended public housing wrecks neighborhood, the taylor homes early in the 60s in chicago, they worked out just fine. john: fine? government programs do often start nicely. within 15 years the taylor homes were a crime ridden, graffiti covered wreck. the government's solution, once again, demolish the entire project. yet, the left wants more handouts. >> the basic democratic citizenship are housing, health care and -- john what happened to life liberty and the pursuit of happiness. >> you can't have life, liberty and happiness if you don't have access to a

hospital. >> if you leave people alone to pursue their own happy is different than taking money from one group to give her people housing and health care. >> we are not giving people housing and health care. even people who live in public housing pay taxes. we are creating an investment. john: we are not teaching dependency? >> you always run the risk of intergenerational laziness. i don't think the welfare state means that. john: but it does says star parker. >> it is easier to take than to make that is one of the greatest gist. you don't think somebody else had to make this. just entitled to it. -- john: entitled to a nice apartment on a tree lined street with a balcony >> i had a fireplace, spay in the back. john: stories like hers drove the push for welfare reform. >> today we are taking a historic chance to make welfare what it was meant to

be a second chance, not a way of life. john: some people predicted trauma we hadn't known since the cholera epidemic. families will fracture, a million children forced into poverty. there would be people starving in the streets. >> the record numbers of people on there, just left the system and nobody died. john: star parker found jobs. >> i started a little magazine and it began to grow. john: she never returned to welfare. >> most people went and jobs. some went home and apologize to mom and moved in and started over back in school. folks started thinking about their own life again. john: two million children rose out of poverty. welfare case loads fell by half. that success hasn't convinced politicians that hand-outs hurt people. >> the president: it is so essential to pass the unemployment insurance extension. john: unemployment used to last 26 weeks. congress has extended them to nearly two years that does

encourage dependency. >> it did encourage me to pass up job openings i could have applied for. john: how many? >> probably half a dozen. john: patrick berry lost his job writing software manuals. he says his 99 weeks of unemployment benefits led him to turn jobs down. >> that would amount to a pay cut. john: fresno, california, 17% unemployment. if people who run employment agencies tell us people turn down jobs all the time. >> we call them for a position and they say no thanks i'm on unemployment. people take advantage to work the system. if the state is going to give me money, why not take it? john: agencies say many people just pretend to look for work. because that's required to get your check. >> they are completely not dressed for an interview in shorts, flip-flops saying i want a job. they will come to the

interview process and we know they are not going to work. >> maybe 2530% of the people that we are talking -- 25 to 35% of the people that we are talking to are not trying. >> the president: i have not met an american who would rather have an unemployment check than a meaningful job. john: incentives matter. in denmark the government once offered laid off workers five years of unemployment benefits. when did many danes find work? surprise, after exactly five years. soden mark cut benefits to four years. then danes found jobs in four years. this year denmark cut the benefits in half. surveys found 1/3 of the unemployed find work immediately when their benefits run out. >> when there were only a few weeks left did start looking at jobs that i had been passing up. >> we should have a safety net to help people who cannot help themselves. i don't think we ought to have

a safety net that lulls people into complacency. john: it is kind to want to help people who have fallen on hard times. government hand-outs encourage people to rely on hand-outs, instead of on themselves.

john skwhraopb makes you happy? money? what could be better than -- better than winning a lottery. look at those big smiles. >> oh my gosh. john: here the surprise for most, a few months later. >> they are not happy. the lottery winners are less happy. when people don't earn their own success. they are not as happy, they are not as healthy.

john: arthur brooks wrote a book about happiness. i think it would make you happy to get a check. >> it would seem but it is not true. earned success is the elixir of joy in an entrepreneurial society. john: people who accomplish things? >> people who earn their success. john: like jesse walter she runs cupcake kids. here's she teaching them how to make zucchini muffins. walter lost a job on wall street when the housing bubble burst. she didn't mope and asked for a hand-out she thought about what can i do next? while helping herself, she helped others. she created jobs. >> we have a manager, awesome. i work more than i did. john: despite that, she is happier. >> i love it.

everyday is different. >> these are the happiest people. those are the people who are most rewarded most of the time by the free enterprise system. john: a recent poll found business owners have a higher sense of well-being even though they work longer hours and make less. >> there's an enormous causal relationship between how much success you think you have earned and how happy you are. if that is followed by money so much the better. >> i can think of 10 entrepreneurs who started with nothing who have made great businesses and they look at this as the american dream. john: one is ralph. >> how are you? john: he started this deli with his father. in six years they grew night a famous wisconsin super deli. >> i love everything about it. my daughter is from california, i'm taking here. john: the owners have given lots of kids their first jobs.

>> we must have hired through the years thousands of kids. john: in is what makers do they create opportunities for themselves and others. >> you can start off and make it for yourself, that's what built the country. >> absolutely. >> it made us so exceptional. john: will we be exceptional tomorrow? that's next. you union thugs areñ÷z#úa valued

names. i'm marianne rafferty. now back to our fox news special, battle for the future. >> i take the subway. sometimes i take the bus. both the bus and the subways in my town are run by an organization called the mta. government monopoly losing money. most of that money goes to pay drivers, conduct orders,

mechanics, most -- conductors, mechanics and most are union workers. >> we represent 30 plus thousand subway and bus workers. john: their correspondent is too rich says the mta. the mta says we are 800 million dollars in the hole. cut us some slack. there's nothing funny about it says mcdougal, public sector unions are parasites that will bankrupt america. >> it is the parasite devouring the host. john: the host he says is private enter price. the parasite is unions and government. >> it is crazy that the private sector is literally dying and the federal government is providing more and more and more pay and benefits to its own employees at the same time. john: mcdougal is a businessman who built this payroll service company from scratch. his business was about

employee pay. he's been dismayed to watch government award their workers raises and special benefits like retirement at age 55. >> it used to be the deal you work for the government, because it is safe, you can't be fired. but you make less. now they make, if you include the pension, double. >> more than double. because they have fantastic benefits. john: people say you union thugs are sucking the life out of america. >> i say the trade union movement is the greatest anti-poverty program ever developed. john: jobs are the best anti- program. there's more job growth when you guys are not involved. >> that is false. the frayed union movement and civil service in this country has been the gateway into the middle class. that's what this is about. john: really? i don't know many in the middle class with benefits like these. union transit workers reach top pay grade after three years. they take lots of sick days

with full pay. they can retire with a good pension at age 55. why is that fair? >> well, let me tell you, why isn't that fair? john: because most people can't. most people work until 65 or longer. >> we work in disgusting conditions, around human fecal matter, dead rats, we breathe in steel dust all day. we are keeping the system running when folks like you are sitting in a studio interviewing guys like me, is that fair? john: to make it fair you retire at 55? >> absolutely. john: entrance it is workers like cops and firemen say they deserve higher pay because their jobs are dangerous. america's most dangerous jobs are locking. - are logging. most dangerous of all fishing, much more dangerous than police and transit work. loggers don't retire at 55

five. >> i don't know anything about loggers. john: i look at the most deadly jobs, fishing is at the top of the list. logging, farming, garbage men, roofers. transit workers are way down. >> this is the richest country in the world. john: we can't afford you any more. >> that's an absurd statement. john: bill's bus company competes with the mta. >> their pay is so much higher than what a private business can afford. it is a corrupt practice to see the way that they burn taxpayer dollars. john: he trains bus drivers but often loses them to the mta. >> they got better benefits. starts with a 30 day vacation. hard to compete. john: not to mention all the sick days. a fourth of your workers took ays. than 15 sickygtç in the private sector they wouldn't last long doing that. >> i don't believe that's true.

john: it is not true a quarter take 15 sick days? >> women have babies. john in the private sector there are women getting pregnant. >> are you saying women who are pregnant -- let's [ talking over each other ] about this. john: i'm wondering why there are so many sick days? >> there's a significant amount of new york city transit workers are women now. it never was like that. when they get pregnant how much time do they takeoff from work? john: i don't know, i'll find out. >> you are pointing your finger at me and you don't have an answer for it. john: good point. so i got an answer. pregnant women, and there are plenty at fox. get 8 to 10 weeks paid maternity leave. not a single fox employee took 15 sick days. the average number taken was just three. 83 transit workers claimed a passenger spat on me. 51 of them took an average 64

days off. >> have you ever been spit on? john: yeah, actually, i don't like it. i wouldn't get 64 days off. >> we've had folks spat upon that have gotten hepatitis, spit in the eye and got eye infections and have taken significant amount of times off. john: unions always have reasons why taxpayers must pay. why do government officials agree to the deal? >> unions do what unions do, if you are dumb enough to go with what was negotiateed shame on them. >> most tone know how to read a balance sheet they are not equipped to manage the process of managing 22 million people to work in the public sector. john: some who were equipped didn't care. pension bill won't come due until later. >> the person who did it is long gone, congressman or senator. we have a crimeless victim. the victim is the taxpayer.

nobody really committed a crime. >> we won! john: the political machinery perpetuates the scams. politicians give workers raises. the workers campaign for the politicians. >> it goes from the taxpayer to the public employee, to dues to the union from the union to the candidate who will promise to do more for the public sector employee,. it's crazy. john: even popular politicians cannot break the cycle. when schwarzenegger tried he was met with this. and cuts didn't happen. >> the legislature has decided it is more important to protect state employees. john: california now has a 19 billion dollar deficit. were the state a private company it would be bankrupted and replaced by more efficient competition. most government workers don't have competition. in the private sector there

are no lies if somebody over pays, over promises they go out of business. >> yes. john: in government? >> we don't have a choice saying we are going to have someone else be our police department. someone else be our fire department. john: union benefits are so good in miami thousands lined up to apply for fire department jobs. some camped out for two days. a few towns escaped the money pump, by privatizing public services. these workers fixing streets, picking up trash in sandy springs, georgia, gee, aren't they working fast? these workers work for a private company. they get more work done in less time. >> we have fewer employees than the city to the north of us and we have exactly the same population. john: the mayor just coincidence she looks like margaret thatcher started privatizing her government's work five years ago. some in town were not happy their tax money was becoming

some company's profits. >> i said what difference does it make if the company is making a profit but you are getting a costs you less. >> we have 18 cameras. john: at the traffic management center they have computers and cameras. when a car catches fire, they send out rescue vehicles right way. >> we try to find the problems before anybody is calling us with it. >> our government is more efficient. john: this realtor was amazed at the difference. >> five or six miles of new sidewalks installed. our traffic lights are synchronized now. so there aren't traffic jams. >> we had a survey done, asking the public, how do you feel about each of these services? the answers came back 90%, very good, excellent. john: sandy springs is an exception. most cities and states are still at the mercy of public sector unions. and the debts keep adding up.

so far, america's been able to pay the bills. >> one day the parasite gets so big there is no host any more and they both die. we are heading in that direction now. john: when we return, the battle over the pier. are you getting your fair share? with capital one's vture card, we get double mi on every purchase. echo! so we earned a trip thgrand canyon twice as fast. uhoh. we get double miles evy time we use our card. i'ltake these. no matter what we're buying. plus the damas. and since double miles add up quick, we can bring the whole gang. it's hard to beat double miles. no, we ride them. [ male announcer ] get the vente card from capital one and earn double miles on eve purchase, every day. go toapitalone.com. what's in your wallet?

john: you smell that fresh baked pie right from the oven. would you like a piece? which of you gets a big piece? progressives say one thing wrong with america is rich keep too much pie they cheat the middle class and poor out of their fair share. the rich do take home lots of pie. does that really hurt the poor? >> if this represents the wealth of america progressives would say, the rich take so much that the poor, just get a sliver. after all as the movie wall street says. >> somebody wins, somebody loses. money isn't lost or made it is transfered. john: that's a mistake a lot of people make says congressman ryan. >> it is government's job to divide up a slice of the pie versus having a society that grows the pie. john: a society that grows the

pie, what a concept. that's how it works in a free society. it is not a zero sum game. the makers who get rich, get rich by baking many more pies. steve jobs, making billions doesn't leave the rest of us billions poorer. his new technology makes us all richer. >> we keep making it better and better. john: rich capitalists are not evil they grow the pie. despite investigations the american income has kept rising. some rich people are very rich. the guy who owns this house owns a dozen others. since our government is so deep in debt, shouldn't people this rich pay more? >> they should pay more. those who have more should pay more. john: is there a point where the rich leave or stop producing wealth? >> the rich have always cried wolf like that and they said if we change this the country

will go away. that didn't happen. john: look at what happened to maryland when that state created a special tax on rich people. >> it was supposed to bring in 106 million dollars. what happened? >> they lost 257 million dollars. john i'm surprised. >> everybody should be surprised. john: this former maryland governor, who is now running again. opposed the tax. >> they are always surprised. it reminds charlie brown. he was always surprised when lucy pulled the football away. they are always surprised in washington and state capitals when the dollars never come in. john: some of maryland's rich left the state. >> they are out of here. these people aren't stupid. >> i've lived here all my life. john: he isn't stupid he lives in that big house we showed you before. he made millions building this business which processes paychecks for companies. >> i started with $3,000 and one employee. john created 13,000 jobs.

-- john: then he created 13,000 jobs. will he keep paying tacks in new york state after the governor signs a tax increase. >> we increased the income tax for millionaires last year. >> it was the straw that broke the camel's back. not that i like to throw the number around but my personal income tax last year would have been $13 800 a day. would you like to write a check for 13,800 a day as opposed to moving to another state where there is no or a low state income tax? john: he did also have this house in florida. >> moving to florida, zero personal income tax. john: he just moved. he now spends more than half the year in florida. new york's governor says the tax increase was a mistake. >> we projected we would get four billion dollars and we well short of it. >> it is just economics. people don't work to pay taxes. people work to get what they can after taxes.

john: art was an economic adviser to president reagan. >> they will change where they earn their income. they will change how they earn. how much they earn. when they receive the income. they will change all of those things to minimize taxes. john: most of us won't. most of us will say i make a little less but it is not enough to make me move or stop working. >> maybe you. but i moved from california to tennessee because of. john: donald trump says, of course the rich will leave. >> they will leave the united states. i know these people they are international people. whether they live here or in switzerland, doesn't really matter to them. john: you haven't left. >> i haven't left yet. john: are you going to leave? >> big story if i leave. if i leave new york that's a big story. the rich people are going to leave. you are going to end up with lots of people that don't produce. then that's the end. john: are we in a death spiral with no hope of return? no say some. we can fix this.

i'll show you their plan, when we come back.

john: is america going to hell in a hand basket. will government feed the takers until the makers are crippled? that's been the trend. now there is something new in the air. >> you work for us! john: for the first time since the founding of the republic, people are visibly mad. they are pushing back against the growth of government. for good reason. the interest on our debt alone will soon eat our future. >> we've got all these time bombs built into these programs they will come due and crash the economy.

john: politicians promise to protect the spending. >> the president: i will protect medicare. john: republicans too. >> going to cut medicare for our seniors. john: occasionally, a politician says enough. when gary johnson was governor of new mexico he kept saying no. >> i vetoed half of the legislative product. john: they must have hated you. >> they did. john: he was called ignorant of the veto process. >> i'm vetoing this piece of legislation because it is way too long and we don't understand what it says. john: after all these vetoes, new mexico must have collapsed in a heap of misery and poverty. >> no, what you would any is you got to sign these bills to get reelected. i vetoed these bills and got reelected. john: reelected by a wide margin. >> man is superior to government and should remain

master over it, not the other way around. [ applause ] john: voters seemed to like that. much of the political class didn't. johnson vetoed even nice-sounding bills like what does he have against childcare? establish a pilot program allowing the state to reimburse grandparents who take care of children in welfare families. [ laughing ] >> pilot program, i think is the key word there. john: pilot program sounds good. we are going to test it before we fund it. >> the agenda was about growing government, spending more money and not making a difference. john: all spending won't. >> i vetoed a dog and cat exercise bill this was a ran bill. but for my signature it would have been law in new mexico that pet stores exercise their dogs and cats two hours a day, three times a week. i signed that piece of legislation, i have to then establish the dog and cat

exercise police. well intentioned, but come on, where does government and where does personal responsibility begin? john: the founders knew. government should end at keeping the peace and enforcing contracts and property rights. limited government leaves people free to pursue their own dreams that's worth fighting for. >> we are in a fight here not over ideas, over an idea. which is the american idea. built upon the founders' principles. john when he sees the tea party protests and entrepreneurs overcoming obstacles, he believes the american idea will prevail. >> that's why i'm optimistic. i think we are going to turn this around. john: the reason art can talk entitlements and still look cheerful. why can you smile when we are going to hell? >> once you low rate flat tax, spending controls turning programs into contribution plans, selling off fannie mae,

freddie mac, selling off gp, aig, you can bring the fiscal situation back into control quickly. you will get such economic growth you will have huge increases in revenue. we can really change america and make it back into the dream that we all really hope it will be. we can do that john: i hope he's right. that's our program and the battle for the future.