DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
White House Pitches New $1 billion Plan as Job Market Struggles to Recover
LARRY GLAZER: Brenda, when will we learn our lesson that despite countless efforts for the government to stimulate the economy we've seen little in the way of results. The landscape is literally, littered with examples of failed government expenditures and it's sinking us further and further into debt. Look we have Solyndra, that's $500 million that could've been spent on education in this country and math and science initiatives. We have Amonix, we have Beacon Power we have Ever Green Solar here in Massachusetts this is wasteful spending. This is not solving the problem. Even the best venture capital in this country knows that they have a low success rate. These expenditures were doomed from the start.
MARGIE OMERO: Well, first of all there's been twenty-eight straight months of private sector job growth and where you've seen job shrinkage is in the public sector, and there's a really great study that compared states that increased their investment in the public sector versus states that decreased their investment that scaled back their funding there, and the states that increased funding has lower unemployment rates, had more jobs, better economies were rebounding more quickly than states that held back. That's a study of here, right now what's going on in states around the country and so if we apply that nationwide to say that by not investing in science and education we're somehow going to create jobs really doesn't make sense and another point is that polls show that people actually support this kind of measure. There are polls recently that showed a majority would prefer that we invest in science and education so we could stay competitive.
GARY B. SMITH: Well exactly, I mean arguing against investing in math and science is like arguing against apple pie, but I'm going to do it with a few facts. Since 1970, a public education workforce has increased a hundred percent. In that same time since 1970 student enrollment has increased eight point five percent. So, the teachers are outnumbering the students eleven fold in that same time. Which would all be good, we would all love that if we had the smartest, brightest kids on the planet, but test score after test score result, after result since 1970 our test scores have stagnated. Graduation rates have stagnated. So all this great money that Margie's talking about investing in science and education has gotten us zero.
JONAS MAX FERRIS: No, I think we're forgetting what caused the bigger gaps this year that were also from Obama part by and large, but yeah they were wasting money there's no question about it, but all of them combined don't add up to just the payroll tax cut, that's $93 billion that we don't have the dough for that's just deficit spending, it's more than all these little pet projects that get through, and the ones that are proposed combined it's going to have to be closed at some point I will say at this point the government is borrowing at such a low rate that we have a little wiggle room compared to say Greece, or Italy right now to run these deficits but we have to have a plan to close them over the next, say five years not overnight that's planned right now. We can't do it forever, but it is a stimulus program largely from tax cuts and increased spending and it's got to be closed on both sides, not just getting rid of a few solar loans.
TOBIN SMITH: Well, I may not be a smart man but here's the math. If we're borrowing $4.5 billion a day, and then we're funding things like and I quote I have to read this one, "University of New York received three hundred eighty-nine thousand to pay a hundred residents of Buffalo to find out how much malt liquor they drank - it sounds insane, but multiply that by a hundred and a thousand. If stimulus really was stimulating, it would've worked. It clearly didn't work and the main reason it didn't work is that for every good dollar that perhaps went towards something that was worth while we spent literally eight or nine dollars that we borrowed that did nothing and went towards these frivolous things. So with the government involved, unfortunately we're going to get a lot more of the frivolous things.
New Mileage Tax Plan Would Require Drivers to Install Tracking Device
GARY B. SMITH: Brenda, I hate this. I don't mind the idea of a user tax for the times you use the road. I hate the idea of the government getting involved. That's my concern. Yes, of course this will spread nationally and the government will be like a big camera in your car tracking your every move and I hate this idea. Look, if you want to do it do it like we did here in the DC area with the dullest Greenway. Privatize the road, let a company be responsible they can collect the tolls just like we do now with easy pass and things like that, that's how the original turnpike started, they were private enterprises it can be done. The problem is, when the government takes in the money they end up not spending it on the highways they put it into other goofy ideas they have for what they think we should do for transportation.
TOBIN SMITH: Well, here's what's different. First off, this idea of mileage tax is regressive. The idea would be that if you're paying a gas tax, which you are doing, if you want to pay less gas tax you use less gas, maybe you get a smaller car. In this case you get a smaller car but you're still going to pay this tax on mileage. It hurts the people who have the least ability to afford it who've moved farther out of town to come in, so this idea is the anthesis. What you want to do is allow people to buy more effective cars that will lower the costs and tax people who will use the actual freeway.
MARGIE OMERO: I think that this idea makes sense in a market where, like the Bay area where there is already a robust mass transit operation, because then it'll also reduce traffic and then people will feel, okay well if it reduces traffic then maybe I'm on board. If it's just only the mileage tax by itself, I think there's going to be a lot of pushback and I think it's going to be open to some other liabilities. I think that if you can reduce traffic as well as improve the local roads and bridges then you're talking about something that's really good for jobs throughout the area, that's really a huge improvement.
JONAS MAX FERRIS: Yeah, we have a gas tax. I mean in the future I think, look we've got a technological revolution that government should take advantage of. I'm sure there'll be chips in our head that we can figure out tax ways to collect taxes or whatever you look at they'll charge you a sales tax for. I will say whenever you move towards a use tax, you're moving away from general tax revenue paying for something and that's away from socialism. I'm surprised that everyone's come out against this, because the alternative way is how we pay for roads now, the gas tax doesn't pay for all of it and it comes out of general tax revenue which means it's socialized. The more you're paying for your own use of something whether it's a bridge, a road, a school - whatever the less that's coming out of everyone's pocket, so that's too bad if you live far from work you're the one using the road, not the guy who doesn't have a car, he shouldn't be paying for that with his general tax revenue. I'm for using technology, in New York they have speed cameras going up.
LARRY GLAZER: This is outrageous! It's outrageous at so many different levels, and one of the reasons it's outrageous - its government picking winners and losers. Here government is picking urban businesses in walking distance as winners over suburban businesses that you need to drive to. The real beneficiaries of this program are going to be the neighboring municipalities because anti-business practices are going to drive consumers and drive businesses outside of San Francisco. Outside of these municipalities, thinking a more business friendly environment.
New Worry For Stock Market As People Tap 401(K) Early
TOBIN SMITH: Well, there's two ways. Number one that money that they're pulling out they're probably never going to put back in. The statistics show they are pulling out at a faster rate than they are allowed to put money back in. Secondarily, that's tax, so that's a bad thing it goes back less. The third thing is they're so far behind in the way they're, that they're going to invest conservatively which is going to be bad for the stock market. They're going to be buying bonds and low paying stuff and not stocks.
GARY B. SMITH: It could be good. I guess it depends on what part of their 401k. If they're taking it out of their 401k, it's kind of more of a money market fund that's really not sitting there and doing anything. Let's say I took my money out and went and bought a Chevy or something like that so in theory if a million of me did the same thing, we all bought Chevy's that should help the price of GM stock. There's more velocity if you will to the money at least it's out there being spent and doing some good, and that of course raises the profits of the company and should in theory be reflected in the stock market. Probably in the long run, I know, be a wash I don't see a lot of downside to it.
JONAS MAX FERRIS: Unfortunately, the individual investors kind of gave up on the stock market somewhere in the 07-08 crash, because that was so soon after the last fifty percent wipe out in stocks. This money is coming out of stock funds so...these 401k's are owned funds. They own stock, and bond and mutual funds and money is coming out. Some of them are not buying Chevy's, unfortunately I'm afraid they're making mortgage payments a lot of cases on which are chromeo investment, then the stock, and bond funds and 401k which is real estate which people thought was a great investment they want to sure it up, make the payments and not lose the house which is underwater in Las Vegas or whatever, that's not a great situation to take a great asset and put into a garbage asset essentially or a lower growth asset. By the way you look at the penalties they're paying at the top of the taxes, the government needs to deal with that issue during these hard times. I will say it's a tanker for the stock market cause it's money leaving the stock market, and it's why the stock markets been stuck where it is for so long. Ultimately it'll flush out, the economy will grow hopefully and we'll get out of this mess. Without real estate turning up I don't see it stopping.
LARRY GLAZER: You know the real tragedy here is not the short term impact which is relatively minimal; it's the long term consequences of this. It's sad that this has to happen even though these balances are relatively small you have an entire generation that's not going to be prepared for retirement. They're going to delay retirement savings for ten years which could be the difference between retiring at 65 or 85. So that's really the problem, and again the tragedy is why this has to happen. It's because it's such a muted recovery, such a jobless lackluster recovery and because we've had stagnant wages. That's the reason this has happened and that's why we have this problem.
Predictions: TECH GIANT TO BUY NOW
LARRY GLAZER: Picked IDV
TOBIN SMITH: Picked Microsoft
JONAS MAX FERRIS: Picked Chevron
GARY B. SMITH: Picked Google
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox