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U.S. poverty remains near 20-year high with 46.2M people falling below the poverty line
And this is after more government spending to help the poor. Are government entitlements making more people depend on Uncle Sam and keeping them in poverty? Yes? No? Why?
STEVE FORBES: We have had half century on this war on poverty and spent $15 trillion on this thing and we have a high rate today almost as high as it was a half century ago. Even when times are good, the poverty rate doesn't fall very much. It encourages all the things that keep you in poverty such as having out of wedlock births and the only time the poverty levels actually fell was in the 90s when you had on the state level, real poverty reform, welfare reform. Then on the federal level it worked. Today we are spending about $1 trillion a year on 126 different programs, 7 cabinet agencies, 6 independent agencies and its all for naught, most of it.
RICK UNGAR: You can always look on how to reform welfare but let's not miss a key statistic of what you just said as you correctly pointed out it was 20 years ago when the number was just as high, not coincidentally we were at the peak of a last large recession. When you have large recession, it naturally follows an increase in poverty. The good news is, it looks like the poverty rate peaked in 2011, and looks like we are coming back down and as things get better there is every reason to expect that that number is going to improve.
VICTORIA BARRET: I agree, and when you look at things in the long term and in that half century that Steve was referencing since we began the war on poverty, the numbers have continued to get worse. I think part of the problem is that we are giving people subsidies governments handouts and they don't really need it. One statistic that I ran into this week is that 40 percent of American school children are on free or subsidized luncheons. 40 percent, that doesn't make sense. The reality behind that number is that about half of those probably really need those free or subsidized lunches we are subsidizing kids who don't really need that help and families that don't really need that help. What happens in the process is that the really poor kids don't get the services they need. I think we should overhaul our entire welfare system and focus better services on the people who really need it.
MORGAN BRENNAN: I think we are putting the cart before the horse here. One of the reasons we are seeing such a record high poverty rate is because we don't have jobs and many of the jobs we do have are poorly paying jobs. I would make the argument that entitlements right now are something that is keeping the poverty rate from going even higher. There are a handful of reports that back me up including the census report this week that shows that if it wasn't for unemployment insurance and social security the poverty rate would be 8 percent higher than what it currently is. So yes, do we need to take a look at welfare down the road? Yes, but I think we need to focus on jobs first, leave entitlements alone, focus on jobs then we will take a whack.
ELIZABETH MACDONALD: The best form of welfare is to give somebody a job as Kennedy said. Why not redirect the entire stimulus program towards small businesses to create jobs and not what the government thinks it can cherry pick in the way of green energy jobs. I'm not for ‘it takes a government village to create jobs' I do think that we have been helping poor people and we should. The reason that the welfare rolls dropped in the late 90s is because we were in a bubble-era of a boom. The food stamps do help child poverty. I say keep the food stamps for those kids, absolutely. I think sometimes those people are absolutely humiliated to be taking food stamps or getting unemployment benefits. They don't want a government lifeline; they want to get a job on their own. They just want an opportunity. We can't make a blanket statement that all people on welfare are bad.
MIKE OZANIAN: The problem right now is that we are in a vicious cycle, the more money we spend as country on entitlement the less money is available to invest in businesses & create jobs that Morgan pointed out, and we correctly needed. Obama doesn't understand that. He thinks that by increasing entitlements, you're going to give people more money, and that's going to revive the economy. That has never worked. What works is investments in businesses that create the jobs. Then you don't need to spend so much on entitlement spending, that's the way to go.
UBS Whistleblower getting $104m award from the IRS
Are big payoffs for whistleblowers bad for business? Yes? No? Why? Should whistleblowers get a dime? Yes? No? Why?
ELIZABETH MACDONALD: I understand that the tax code is just one giant industrial policy on steroids for corporations, I get that. Separate from that, this smells like East Germany to me. There is a piece of the recent statement put out by some in government that we belong to the government, when no, we own the government, the government works for us. Small businesses do not work for the government, businesses do not work for the government, we are not a revenue stream for government, nor are individuals providing a revenue stream for government. It's turning us into snitches for the IRS, their own little police force for a favor factory that is known as the US tax code.
MIKE OZANIAN: I have no problem with this guy getting paid if he helped catch the crooks that alleged he helped catch. The police department uses and pays informants have long done that and has a lot of success with it. If this guy is capturing crooks and people who have committed crimes, what's wrong with that?
JOHN TAMNY: I have major problems with this. For one, he was helping individuals keep money from reaching the government which is good for the economy but beyond that, you have to look at the whistleblowers as modern versions of ambulance chasers. Do you really want a bunch of disgruntled employees to team up with a force of government that has unlimited money and go after businesses? If you want to tank the economy, give individuals the right to do this, to take their company down and get paid for it.
STEVE FORBES: No we don't. If you see something being done wrong, you should do something about it, and 2, you shouldn't have to be paid to obey the law, you should do it anyway. This guy, if he committed a crime, shouldn't have committed it, should have been caught, should go to jail, -- only 31 months, he gets more than the top 1 percent in this country now. 40 million net left after taxes and legal fees, that's outrageous. You should do what's right because it's right not because somebody got paid off.
MORGAN BRENNAN: After taxes and legal fees it's only about $44 million. The word snitch? It's called a whistleblower, are we the mob here? I think this is really good for business, I think there is a lot of risk attached to whistle blowing so there does need to be an incentive for people to come forward in certain cases. I think this is good, it's going to encourage businesses to clean up their internal review and prevent things like fraud. We have seen a handful of banking scandals in the past couple of years. Maybe if more people felt more incentivized to come forward as whistleblowers we wouldn't have seen things like customer funds going missing at MF global.
BILL BALDWIN: Paying whistleblowers sounded like a good idea when it was invented but it just turned into another looting scheme in which lawyers get rich and everybody else gets a little bit poorer. In that sense it shares its property with some other legal schemes such as rewarding people who file lawsuits over wheelchair ramps or rewarding lawyers who file lawsuits over volatile stock prices. In the end, the lawyer gets rich and everybody else gets a little bit poorer.
New analysis showing colleges recouping losses, yet still hiking tuition
Should colleges start cutting tuition, and give money back to students? Yes? No? Why?
RICK UNGAR: These schools have to get their priorities straight. It's great to build new buildings; it's great to have new research programs, pay teachers lots of money but it's supposed to be about educating kids. If you don't do that, only the wealthiest people in the country are going to have an education and if we don't support these kids who are going to become the lawyers for the future?
JOHN TAMNY: I don't think colleges owe whiney college students anything. We have to remember what endowments are for. They are there to get the top professors for research and dare I say it, the top football coaches to win on the field so you can get even more in the way of donations. If you want to educate kids, you have got to get big donors. If you want to bring tuition down, the way you do it is to get the government out of subsidizing tuition; you'll see it fall very quickly.
VICTORIA BARRET: Something's wrong and the increase in tuition prices has tracked exactly with the increase and burden of student debt. The debt, thanks to the government we have created this wonderful system where it's just fueling the fire and tuition rates continue to go up. College accessibility is not really the issue in this country, when you rank us globally, we are doing wonderfully on college accessibility, but our graduation rates stink. So our colleges need to lower tuition rates because they are certainly high and then they need to do a better job of getting kids to graduate.
BILL BALDWIN: Let's not be naïve. Let's understand that prestigious universities for what they are, which is giant, profit making businesses whose general partners happen to be tenured professors that's even true at state supported institutions like the state of Virginia. If they are smart businesses, they will charge whatever the traffic will bear. That's what's going on.
STEVE FORBES: The way you get that done is by what John wants to do, to remove government subsidies because when subsidies go up, administrative gloat goes up, as Vicky pointed out debts go up, and by the way David, if they don't get their act together without reforms to get government out of the way, you're going to see the web do the same thing to higher education, what it did to media, turn it upside down. You can get a lot of great courses now from fine universities online for free.
Lots of headlines about more stocks reaching new highs. But what are the best under-valued stocks to buy right now before they bounce back to highs?
ELIZABETH MACDONALD: NATIONAL OILWEEL VARCO (NOV)
52-WEEK HIGH: $87.72
52-WEEK LOW: $47.97
BILL BALDWIN: CEDAR FAIR (FUN)
52-WEEK HIGH: $33.50
52-WEEK LOW: $16.86
MORGAN BRENNAN: ALLIANCE RESOURCE PARTNERS LP (ARLP)
52-WEEK HIGH: $83.80
52-WEEK LOW: $50.42