Empty nesters expecting company?

Survey: 1 in 3 homeowners expecting adult kids or parents to move in

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JOB CREATION LESSONS FROM 7 SWING STATE GOVERNORS

GARY KALTBAUM: They are helping and letting businesses flourish. I'm here in Florida, and they have had a billion dollar tax cut for businesses over the past three years with a great economic development agency that cares about business versus other states like California. California continues to raise taxes by taking money out of the economy and placing it into the hands of government. That's why Florida is getting its act into gear.

JOHN TABACCO: I think the first thing that we could all learn is that five of the seven swing state governors are Republican, and a lot of the macro Republican policies seem to be working at the state level. If you look at Wisconsin, Scott Walker had to go up against a recall just to get collective bargaining with the unions. John Kasich in Ohio did the same. John Kasich has gone out there and has had about eighteen tax cut plans, and he's also straightened out the tax code in Ohio. I think these are the type of things that either presidential candidate needs to implement going forward to start creating jobs again.

SUSAN OCHS: On the regulatory front I do agree with John, but this notion that tax rates are this panacea and the policy magic wand is completely false. If you look at Ohio for instance they are at twelve percent, the highest corporate tax rate of any state in the country and they have one of the lowest unemployment rates at 5.2 percent. Nevada has almost the lowest tax burden on a personal and corporate level. On a state level they have one of the highest unemployment rates. Tax rates are not the panacea that Governor Romney and a lot of the Republicans are trying to pretend that they are. I do think though that the business climate is an important issue and that takes into account things like investment and infrastructure, skilled labor force as well as regulatory burden.

TOBIN SMITH: Iowa also has a lot of farmland and they are doing okay. You can be geographically correct, but let's just talk about regulations for a second. In both Iowa and Colorado for instance, I know of many companies that have left California for Colorado specifically because their cost of doing business was more than twenty percent lower. We have added thirty-two thousand additional pages of regulations at the federal level. At the state level Colorado got rid of a thousand and I think that's the right direction.

JONAS MAX FERRIS: At the margins a lot of the things that these panels are talking about are true. It's nice to have an owner business friendly environment, but there is something much bigger going on. You can tell because Nevada and Florida have no income tax and they are two of the worst states in the entire country for labor markets at this point. If you go to Zillow and chart home prices in every state against unemployment rates you will see exactly why some states are doing poorly and why some are not. Texas and Wisconsin never had a housing bubble. They had one in Nevada and Florida and it has destroyed the economy. The take away for both governors and the federal government is to not allow bubbles to build in the economy. At the very least build up resources so you're not broke like a lot of these states were when this went down. This has been the driver in the economy over the last five years and not these policies.

SURVEY: 1 IN 3 HOMEOWNERS EXPECTING ADULT KIDS OR PARENTS TO MOVE IN

JOHN TABACCO: I think it is good news because you have to start somewhere. Many of the people that I know who have kids moving back in with their parents is because they want to save money. Saving money is now a lost art thanks to federal policies we have. Secondarily, when people are moving back in they are fixing up their basement, they're painting their rooms and buying new wallpaper and rugs. We have to start somewhere by buying some durable goods and maybe hiring a handy man or a paint company. These are the little things that may be the building blocks to getting us back on track.

JONAS MAX FERRIS: There is a big issue here and I don't think either presidential candidate is addressing it. These kids are coming out of these hundred thousand dollar degrees where they majored in history, film and things that are not going to match with the work force of today. They are not a good fit to where jobs are. If we don't address this they're going to be burdened by debt. I wish when I got out of college that I could've gotten an FHA loan with three percent down to buy a home. In many markets there are homes under a hundred thousand dollars. Then you'd have a house and you wouldn't have your parents breathing down your neck, but these kids are choosing to be home over this. It must be a very bad labor market and that's what we really have to address as a government and not these little patchwork things.

SUSAN OCHS: Debt is a huge issue. I wouldn't necessarily only say that it's because people don't have jobs, but I do think that a lot of people are trying to be more economical about their living situation. I think this is a great trend to see people trying to save and help pay down their debt earlier.

GARY KALTBAUM: I love my sons and one of them came home this weekend from college and brought home a dog and the dog did you-know-what on the rug. Now I have to buy a new rug and that will help the economy. There is nothing good about twenty something year olds living with their parents. For the most part these are people that don't have a job. If they don't have a job they're not spending. If they're not spending the economy is worsening, if the economy is worsening the jobs are worse and then it leads into a vicious cycle. For a sign that the economy is getting better you should see the opposite. This is the best time to have jobs because interest rates are so low and the ability to buy a small condo with three percent is free money at this point in time.

TOBIN SMITH: From an economic standpoint we are not getting household information. Household information represents about one half to sometimes one percent of the entire GDP of the country from home purchases and so forth. By the way, these kids aren't buying cars either. No houses, no cars - I just don't know.

REPORT: U.S. SPENDING ON WELFARE PROGRAMS TOPS $1 TRILLION A YEAR

TOBIN SMITH: Unfortunately this is not a financial issue, it is a cultural issue. If you look at the changes in children born out of wedlock, divorces, and single households with non high school degrees this is where poverty in the United States come from. We are not addressing the right issues and that's usually what we do here. We don't define the problem well and we try to solve it with the wrong medicine.

JONAS MAX FERRIS: Some of this welfare spending is need based college grants and school tuition - so you could argue that they're trying to help that. When this whole war on poverty started when LBJ went around the country the people were really poor. The poverty level was malnourishment, hunger and no healthcare. I don't want to say that you're okay when you're poor today, but at the poverty level today there are a lot of people on food stamps. You have a certain level of Medicaid that you didn't have before so you're better off because of these programs. That doesn't mean that they don't need to be cut or tweaked. I would argue that everything but defense is welfare spending. Social security is welfare spending if you didn't put in as much as you're getting. Medicare is welfare spending because if you took it away most eighty-year olds wouldn't be able to afford healthcare. I don't just want to target the poor as needing the cutback, I would say across the board that government needs to cut the spending down. I'll also say that half the country is slipping through and that's the real problem that this administration needs to address. These safety net programs are going to grow proportionately. Most of this growth happened between 2008 and 2009 because of the economy. It's not because of major changes because people are getting poorer and that has to be addressed.

GARY KALTBAUM: All this money has not lowered poverty and it hasn't lowered welfare. The war on poverty has absolutely failed. When you take a trillion dollars from producers and hand it to non producers you cannot expect good things to happen. You have got to turn non producers into producers and you're not giving them any incentives by handing them over a check. We had welfare reform in the nineties that were working and we are turning it on its ear at this point. We are actually advertising for people to go on food stamps and we've lowered the restrictions to get the food stamps. I want to hear the advertisements that get these people off of welfare and not onto it.

SUSAN OCHS: Pell grants and worker training programs are not things that are cash handouts to the poor. In fact, if you look at the numbers the direct cash aid has gone down from the Bush administration. Obama has been actually reducing those levels, and the main spending here has been healthcare and the reason that it's been increasing is because healthcare costs are increasing which is what we see across the economy and across the board in government. The percentage of healthcare spending is the same as it was in the Bush administration.

JON TABACCO: If you want your kids to grow up and become productive you don't hand them an allowance every week you hand them their allowance every week when they put the garbage out. You have to incentivize workers to want to lift themselves up. By increasing the handouts to them that's not giving them any incentive at all except to sit there and take in the Obama administration's new policies of expanding the new types of things that are considered, "work" under welfare.

PREDICTIONS

TOBIN SMITH: (AOL)

JOHN TABACCO: (MSFT)

GARY KALTBAUM: (PFE)

JONAS MAX FERRIS: (HAS)