$1 trillion debt bomb in the u.s. will the bailout plan put americans back to work or just blow up in the face of taxpayers. hi,. >> joining us this week, the president of mercer and associates, david administrators e. tracy, do you think forgiving student debt is a good idea or is it horrible for taxpayers? >> my heart bleeds for the students carrying these loans. the average is $28,000 but it's not going to create jobs, it's not helping the problem. the problem is lenders will give loans to anybody with a social security number. and schools know this so they keep raising tuition knowing the kids can get funding. they raise tuition during your four years there. that's the unfair part.

forgiving the loan is doing nothing but putting the burden on the taxpayer and starting the bubble all over. >> she makes a great point about the cost issue. 55% of kids are graduating with student loan debt, a big burden on them. should we forgive it as they want to do in d.c.? >> one of the unfortunate things is you can't file for bankruptcy on a student loan. you're prevented. they can go after you for the rest of your life. that should be changed. because this is a -- this is the fastest-growing debt category we have in the united states. more so than anything else. and it's not going to help us because it's a debt against the future. yes, they've got to find a way to deal with it, meaning, yes -- i know it's not the right thing to say from a moral point of view but you have to settle this debt for less than what is face value. >> if you look at the overall economy here's why it matters.

it's the youth generation, 18 to 34. they don't have a 401(k) and they have other a trillion dollars in outstanding student loans, more than cars, credit cards and they're the ones that need to build the economy. are we in trouble? >> we are. what the president tried to do and members of congress are trying to do is given the current economic situation, to provide conditions that allow for students to actually pay back loans, whether reducing the term, keeping interest rates low. we did that for banks and tried to negotiate with corporations or taxpayers and the government to lower rates. there's no reason students shouldn't be able to do the same so they can afford today to college, pay their their loans and become also -- have more discretionary income to be consumers. >> that's the thinking, there's more consumer spending than jobs

are created. does that fly? >> it doesn't fly. it doesn't get off the ground. there's no mention of public education in the constitution at all. what do we have? a government monopoly on education. david you're laughing but we've established -- >> it doesn't have to be every time guaranteed by the constitution, it's the right thing to do. >> its the right thing to do but it's stealing from taxpayers. loan forgiveness is taking money from people who earned it and giving it to people who haven't. >> the corporation are stealing from our tax revenue base. >> they're providing a tax revenue base, that's another discussion. >> offwho are havens? >> that's not discussion. let's bring in john. let's talk about the kids, john. back to the kids here for a second that are saddle with this debt, which is disheartening. you want them to get higher education but tracy's point was good. it's too costly. they've got to get loans and

they're going to the government. >> what tracy and wayne is talking about is this has exploded. the student loan debt. there's two ways to look at. this this is the public debt, which the government is backing and subsidizing and keeping interest at 3.4% compared to 6.8% which is scheduled for july. that's a government subsidy. that has an interest rate that's reasonable even at 6.8%. the problem is the for profit colleges. they're absolutely criminals, they're raping the kids and getting -- you cannot default in bankruptcy so they're saddling kids with debt. they know there's no way they're going to pay it back. >> it's all of. you have a whole system dominated by government and you're blaming one tiny sliver that happens to be free and trying to act in a for profit manner. >> my gosh, johnathan, he's -- >> you cannot defend these

universities, johnathan. they're taking advantage of the fact there is free money available from these kids. the worst is the institutions have the audacity to raise tuition in the middle of their four-year term. it's unfair. that's why -- >> take -- think about the message you're sending to the students you want to help. don't worry about the loans you took out. you don't have to pay those back. the word credit means to believe. if you don't believe they'll pay it back, why make the loans. >> you don't get it in bankruptcy. that's why banks are giving loans, they know for the rest of their lives, they can follow that kid around and collect. >> hold on, guys. one at a time. there's something else that came up this week that's interesting. going to generation y. they're delaying having children. they're delaying buying homes.

they're delaying any meaningful push into the u.s. economy. we've got unemployment at 8.2%, that could stay the same if you have an economy that goes nowhere because you have this generation of youth sitting on their hands. >> yes, but i come back to what i said. you have to change the law about the bankruptcy part because people are making loans because they know they'll collect and chase them the rest of the life. but we have systemic thinks about unemployment in the country that have to do with education and i'm personally involved in one, the garment business. all the business has gone overseas. why is it going overseas and why won't it come back? the generation of my mother, who had a sewing machine and people who made and sewed is gone. kids don't do that, you all don't do that. forgive me. you don't know how and as a consequence that's -- those jobs

are gone forever. if i could -- >> let me go to you. he's making an interesting point about the fact that the younger generation is lazy. i don't think he pointed the finger at me. yes, he did. at the same time, good point about the jobs. >> david mercer. good point about the jobs. >> we need to stay on point. this is not to outright forgive the loans and balances they have. it's to make the rates equal to the financial environment and secondly, instead of 25 years terms, make it 20 and instead of it being 50% of their monthly income, make it 10% so they can manage their way through paying loans back. we're not block looking for them to go into bankruptcy. if you leave them with more discretionary income, allow them to pay bills, you create consumer demand, but you also

create an educated workforce affording their education so we can come into the workforce and perform. >> it's all we're missing is a better spreadsheet. number crunchers to apply a government entitlement not in the constitution. >> we have a bill that provided a set of educated workers -- >> this -- quicklily torques wayne's point. two things happened. everyone's -- a lot of people are unemployed so stayed in school longer and went for graduate degrees. two, i think the point he was making is that there's this societal need to put everybody in college and with we need people to sew, people who can do blue collar jobs. we're losing them to other countries and that's part of the reason there's a trillion dollars in student loans. >> funny enough, everybody. >> they'll be gone forever. >> the bean counters are the ones getting jobs, the

engineers. we're going to take a break. when we come back, are we making it so hard to set up shop in america that major companies would rather take chances with this? one just did.

choose mexico over the u.s. eau de announces plans to open a factory in mexico despite drug wars. the u.s. has been courting to open the plant in the u.s. what message should this send to washington do you think? >> well, that money goes where it's treated best. that's the old saying. and the drug war in mexico's horrible. but we've got really a regulatory assault against corporations here. especially car companies. osha, the epa, the hsb, the ntsb, literally on and on. none of those regulatory entities existed in henry ford's

time. bottom line, it makes productivity more expensive and difficult. that's why so many companies look to operate outside the u.s. >> here's the deal audi got. they'll open by 2016, $2.6 billion to build the plant. audi is telling us it's a better deal for us, more productivity, workers are cheaper, that's why we're doing it. >> better come with kevlar. they've had 50,000 drug-related murders in mexico a warning against travel. money goes where it's rewarded and needed the most. luke at right-to-work states. a lot of car companies to relocating to the south so they don't have to deal with unions or legacy costs and that's where manufacturing is done. when china pays workers $4 an hour, we can't compete with that. companies are saying we're going somewhere where we can hire low-cost workers. there's a giveup for security

and home rights and standards. but that's what companies are willing to do at times and that's why we're losing audi to mexico. >> david, audi is a business and wants to overtake bmw. do you think that's a good plan? >> the plan is to overtake bmw which has plants in the united states. we're not the only country where plants for auto america's are positioned. i would flip the script and say nearing with 1,000 workers with audi, we'll see more mexico with less guns or drugs, less immigration into this country, at least a manageable rate, so there's collateral benefits for audi doing it in mexico and stabilizing their economy for our neighbors next door that have been causing collateral damage to us in the last couple years. >> do you think david's point is worth them doing this in mexico

and not opening in tennessee where they had looked to open up a plant? >> but their sister brand, volkswagen, is in mexico already so i understand that. the part that bothered me is the chairman of audi said that they had competitive cost structures in mexico and existing free trade agreements and that was part of the decision-making process. we should be having that. how come we don't have that? how come he's not saying the united states has that and i could build here. that bothered me. >> his point about free trade was that you do have free trade agreements. north american free trade in place nor years. the point was open up all north america. it is open thanks to washington. we're taking advantage. >> you have to come back to the cost. it's not a question of good, bad, it's a -- they're looking at the bottom line and they're willing to stand in the face of a murder rate that's one of the greatest in the world, a security problem, and they're

willing to take it on because of the costs. they'll get a substantially lower cost. we have a law here that did [ speaking foreign language ] and john, i would defer to him, on the texas border. you had a tax break by establishing a factory just over the border and you could get a tax break doing that and still get the advantage of the low-cost labor. >> i disagree, wayne. you're fundamental wrong. there's no difference between morally right and -- freedom works, capitalism works. we're competing in a global economy so why wouldn't we have the most regulatory free zone. we're competing against countries just waking up to capitalism. we're shutting down markets and they're opening theirs. >> if we saw plants here, hyundai, toyota, bmw, moving to

mexico we might have an issue. but when lowering our costs on. >> for better regulation? >> they're sustaining their operations here. here not leaving. and audi already -- or volkswagen, which owns audi, has plants in mexico so you have economy to scale. it's not bad they're helping to stabilize mexico which means less cost to us whether on immigration control, drug war. >> tell that to the folks in tennessee who don't have jobs. >> back to mexico and -- you have about 48 killings per day in mexico yet businesses are willing to take that chance because it's more economically feasible there than here. is that a problem? >> yeah, it is a problem to tomorrow degree. but you can't stop it. you can't stop a company from going to asia, china, africa, despite the fact there's human

rights violations or security problems or totalitarian government. if they can get cheap labor they go there to build cars. i hope it solves the problem. i think the problem is more systemic in mexico but we have to do something with mexico at least getting this company will supply 1,000 jobs. mitt romney floating a plan to get rid of cherished mortgage tax deductions on certain homes. why someone here says this is a great idea for housing. hi, i just switched jobs, and i want to roll over my old 401(k) into a fidelity ira. man: okay, no problem. it's easy to get started; i can help you with the paperwork. um...this green line just appeared on my floor. yeah, that's fidelity helping you reach your financial goals. could you hold on a second? it's your money. roll over your old 401(k) into a fidelity ira and take control of your personal economy.

this is going to be helpful. call or come in today. fidelity investments. turn here. coming up, mitt romney looking to scrap mortgage deductions. someone says good, it will help save housing. plus, more young women gunning

for a high paying career.

hello, i'm uma pemmaraju i'm in washington. three more secret service agent stepping down and another investigated over the scandal involving prostitutes in colombia. they were part of the team sent to. >> jeb bush is saying he'll not be running as vice president. mr. bush created a buzz when he told a conservative website he would consider it if mitt romney asked him to be his running mate. bush and his father have thrown their support behind mitt romney. and first teams out in new york city, detectives searching for clues in the disappearance of a child to vanished more than 30 years ago. that's coming up.

we'll also have an interview with congressman micah of florida. stay with us. if. >> g.o.p. presidential frontrunner mitt romney revealing how he might get rid of tax breaks to lower tax rates. one idea is scrap the mortgage interesting deductions on second homes for high income earners. you think this is a good plan, how? >> it's with good to see romney coming out with a plan rather than telling those facing for closure, let the market bottom out. second home buyers are not -- are paying with cash, they're not affected necessarily by the deductions and i don't think it will affect the market. to do so on your average buyer i think would be troublesome. until the market steadies out we need mortgage deductions for the middle class. for the wealthy paying cash, it's fine.

>> wayne, half of -- half of second homes last year were paid in cash. >> yeah, but you couldn't be more wrong. of course it's going to hurt the housing market. anything you do like that will hurt. you're saying rich people don't maybe poor people want a second home too, pal. >> they might need a home. >> you're going to take it away on second homes? take it all away, flat tax this thing because it's -- on the rich again w he pick and choose. one-third of people who qualify for mortgage deduction take it because the rest take the standard deduction. i'm not sure it will hurt the housing market but it will hurt morale. >> good or bad idea? >> neither. it doesn't matter. interest rates could be zero and have double the mortgage rates. if people can't afford to buy homes, they can't afford homes. second homes are investments. why give a tax break for

investments. >> johnathan? >> maybe i'm old-fashioned but the constitution and equal treatment under the law matter. so that means getting -- as tracy pointed out, all deductions and stop treating people with two sets of rules. >> interesting. thank you for joining us. >> coming up, did a new report reveal women are about to become the driving force in the economy? and it has nothing to do with the political war on women. hey, did you ever finish last month's invoices?

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it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, . it is time for what do i need to know for next week. >> it seems more women 18 to 34 wants high paying jobs than male counterparts. could the tables are turning? you young people better watch out. >> guys, watch out. >> the epa made a ruling or fracking. good for the natural gas

industry. if fleas there's not a hurricane, it will be beneficial. >> i'm not crazy about the banking industry but if you have to go there, look at wells fargo. it's one of the best run banks in the business. >> big west coast name. jonathan. >> i'm avoiding banks. the dodd-frank financial regulation is killing them. knight capital group, kcg are picking up the slack. >> nobody's worried about the banks. wayne, you don't seem concerned. >> i'm not crazy about the group as a whole. i'm saying wells is a standout in the group if you pick a major bank. >> thank you very much. that's it for the cost of freedom block. thank you for joining us. have a great weekend. long time republican senator orrin hatch on a fight for his poca