(BEGIN VIDEOTAPE)
JOHN STOSSEL, FOX BUSINESS NETWORK ANCHOR: What will the future look like? Will it look like this?
(voice-over): Maybe we'll live in an America where cars drive themselves. Where we have a choice of living in islands in cities where innovation thrives, far away from control of any government.
(on camera): Let's compare the Libertarian future with the Obama future.
BARACK OBAMA (D), UNITED STATES PRESIDENT: I've talked about the need to invest in high-speed rail and high-speed Internet. I'll be talking about the need to invest in education.
Invest. Invest. Invest.
STOSSEL (voice-over): Can we afford all that investment?
OBAMA: By 2035, 80 percent of American's electricity will come from clean energy sources.
STOSSEL (on camera): So he says, but president's are always make predictions about the future that don't come true.
Energy independence, for example. They promise...
GEORGE W BUSH (R), FMR UNITED STATES PRESIDENT: Bring us closer to energy independence for our country.
RICHARD NIXON (R), FMR UNITED STATES PRESIDENT: By 1980.
GERALS FORD (R), FMR UNITED STATES PRESIDENT: By 1985.
OBAMA: In 10 years.
STOSSEL (voice-over): Really? He also said the stimulus would keep unemployment below eight percent.
He promised fuel from wood chips would break our addiction to oil.
He promised no new taxes.
FDR promised to cut the size of government.
We did not get any of those things and now we have a $14 trillion national debt. What if you could opt out of federal handouts and in return pay much less tax? Congressman Ron Paul just suggested that and will be here to explain.
So, what's in our future? Self-driving cars? New places to live? A free Internet?
That's our show, tonight.
ANNOUNCER: And now, John Stossel.
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STOSSEL: This week, the president's released his new proposed budget. This has something remarkable in it: actual cuts. He listened, the president listened to the voters or to us or maybe he just woke up and started paying attention to the monstrous debt or maybe not to.
In the words of Washington reporter, Fred Barnes, this is pathetic. The cuts are tiny. Even if they do make all of them, we're still going to drown in debt. But hey, at least let's celebrate that some turning point's been reached where even a liberal Democrat acknowledges we have to make cuts.
But if we hope to actually stop our slide into insolvency, we have to cut much more. Will the politicians have the guts to do that? Let's ask one. Utah's new senator, Tea Party member Mike Lee.
So, really? Will you guys have the guts?
SEN MIKE LEE (R), UTAH: Yeah, we will. We will because the people are demanding it. Because they understand that if we continue spending at this rate there won't be any money left to spend on anything, whether it's entitlements or national defense.
STOSSEL: Yeah, yeah, they always say they want to cut, but when it comes to specific programs that have the constituency, they fight back.
LEE: That's right. And that's part of the problem, John, that's why I propose a balanced budget amendment that would put Congress in a straitjacket. Once that's in place and once deficit spending in perpetuity is no longer an open discretionary matter for Congress, then and only then will we actually start making the government live within its means.
STOSSEL: And explain this 18 percent cap you're proposing.
LEE: Yeah, I propose that in each Congress, Congress spend no more in each fiscal year than 18 percent of GDP, Gross Domestic Product, during the prior calendar year. We're at about 25 percent right now and that's too much. So if we cap it then Congress will have to live within its means.
STOSSEL: And you know, totally cap it, you just say, if you're going to try to spend more than that you have 2/3 vote.
LEE: Two-thirds supermajority vote. And so, in a time of great crisis you could have members of Congress uniting behind something to circumvent that and that might happen from time to time, but we want it to be rare and we want it to be relatively difficult.
STOSSEL: So, I'm looking at my headlines from my colleagues in the media in response to the small cuts that President Obama proposed, slashing domestic programs, jeopardizing the nation's safety because of Homeland Security cut, hammering the working poor. I mean, that's from tiny cuts. What do you thing will happen when you're making bigger cuts?
LEE: You know, I think if we were honest with ourselves, what we would acknowledge is that the failure to propose cuts larger than what have been proposed, is what will jeopardize national defense, is what will jeopardize low income Americans in the future, because again, look, if we continue on the current trajectory, the one established by the president's proposed budget, we'll roughly double the national debt within 10 years. So, if you're concerned about any of those issues, you should want Congress to balance its budget and to take steps to do so now, otherwise we won't have money for any of those things.
STOSSEL: All right, let's get specific, you happy to cut the entire education department?
LEE: The Department of Education is a great place to start. Education is and always has been in the area in which the states have primacy, they have primary authority. It is the states that are sovereign in this area and I think the states would welcome this.
STOSSEL: Would you kill all farm subsidies?
LEE: Well, I believe in the free market system. I believe we should start walking away from subsidies of private industry. It's, of course, difficult to get that done in one fell swoop, but I think there's widespread support in both houses of Congress, in both political parties, to start backing off of our potential subsidization program for private industry, including agricultural products.
STOSSEL: House Republicans proposed 100 billion in cuts. Is that the enough?
LEE: Well, no...
STOSSEL: It's about the same that Obama suggested.
LEE: Look, it's not enough, it's not nearly enough and I don't think that there's anyone who's seriously suggesting that that's enough.
STOSSEL: Would you sign on to Rand Paul's 500 billion of cuts?
LEE: I'm still examining that, but my strong inclination is yes. I might disagree with him as a few particulars, but on the whole I think he's got a very good proposal.
STOSSEL: Now, I really want this to happen. I just can't believe it. I'm sort of new at this. You're new at this, politics. Really? You going to make these cuts? They've never make serious cuts, we still have mohair subsidies, for Pete's sake.
LEE: That's right, that's right, we've never made substantial cuts along the order of what we really need which is exactly why it's time that we push for this and it's time that we just get it done. Look, there are people all over this country who were reverting to what they were spending a few years ago and they deserve a federal government that does the same.
STOSSEL: I hope they get it. Thank you very much, Senator Mike Lee.
LEE: Thank you.
STOSSEL: Now Senator Lee has this 18 percent solution, any spending above that requires a two-thirds vote. I assume that sounds pretty good to my next guest, economist Veronique de Rugy from the Mercatus Center and Nick Gillespie from "Reason" magazine.
You have something you call 19 percent solution. But before we get to that, let me continue, let's put up the graph up of spending, here. I'm going to get out my light saber to keep my theme of the future.
This is the history of government revenue versus how much we spend. And back in 1973, under Nixon, got pretty close, we almost got the surplus, but then they spent more and build the debt much more. Here is Clinton, we actually got to surplus, then we lost that and this is the amazing part to me under both Bush and Obama, the lines split, that's how we get a one and a half trillion dollar deficit.
VERONIQUE DE RUGY, MERCATUS CENTER ECONOMIST: Yeah well, you see that spending is driving the imbalance, spending is the problem, right. And of course, President Bush...
STOSSEL: If we got more revenue somehow.
NICK GILLESPIE, REASON MAGAZINE: But this, I mean this -- what that is, think of those are two kind of crooked lines and it's two drunks walking into the future, they are staggering all over the place. Revenues we know we can bank on a certain percentage of GDP as government revenues, spending is the thing that we can change around a lot and what you see there is the constant uptick of the spending with punctuated bursts and spikes upwards and that is why we are broke. We're spending more money than we're taking in year after year after year.
DE RUGY: And we're spending more money even though we know we have those gigantic explosion in entitlement spending and that we should actually be cutting spending or reforming entitlement. We can't have it both ways, that no one seems to be ready to do it.
STOSSEL: All right, but the people on the left would say, yeah, you on the right are talking about spending all the time, but we could raise more revenue. There are a lot of rich people, you could tax me more and get more money.
GILLESPIE: Well, this is one of the things that is really fascinating. If you take a back at 1950 you can see that basically, and this chart shows that, that government revenue has averaged around, between 18 and 19 percent of Gross Domestic Product, of total economic activity, despite all attempts to raise the top tax rate, to lower it, to raise business taxes...
STOSSEL: Let's explain this graph. It starts in 1930, 1950 tax rates were 70 and 90 percent.
DE RUGY: So, this blue line shows that tax collection, as a percentage of GDP, the yellow line show the evolution of the top marginal tax rate. And as you can see, it went up dramatically in the fifties and seventies...
STOSSEL: But they still didn't get any more revenue. Why? Because people cheat?
DE RUGY: Well, so people change their behavior when they are taxed more. That's one thing we know. Even if, for instance, people who love to work and work really hard and make a lot of money might not actually stop working, one of the things they do is that they have less money in the end and they buy less, they buy fewer things, they hire fewer people and in the end that means less revenue.
GILLESPIE: What the blue line shows is the upper limit of what we can predictably expect to get to spend on government. That is...
DE RUGY: The best case scenario.
GILLESPIE: Those are in best case scenarios; 19 percent which is what the Congressional Budget Office says will be the amount of revenue that the government will have 2020.
STOSSEL: So, even with 70 percent tax rates or 30 percent tax rates, 19 percent of the economy is what comes in?
GILLESPIE: And this is historical. When people say, oh well, you know what, that does not mean anything because what we can do is start, we can get rid of the Bush tax cuts we can do this, we can tax candy, we can tax soft drinks. Doesn't matter, in the end, this is what you can expect and if we want a balanced budget, the government cannot spend more than 19 percent of the economy in any given year.
STOSSEL: Which means cuts and with the tiny cuts proposed now, the shrieking from my colleagues in the media, here's a column in the "New Republic," by Jonathan Cohn, "Bye-bye Big Bird. Hello E. Coli."
So, we're going to lose Big Bird and we're going to be poisoned by the food we...
GILLESPIE: Finally a "Sesame Street" episode that I want to watch. You know, if "Sesame Street," you know, if Big Bird is going to be a casualty of reducing federal spending and there's no reason to believe it would be because the marketplace loves Big Bird, they'll pay for it, so be it.
STOSSEL: It already make...
GILLESPIE: What we're saying now is you can have "Sesame Street" until the day you die, but you won't have Medicare, you won't have a retirement plan, you won't have any number of things because the government will be broke.
DE RUGY: And more importantly, there is always this very unrealistic assumption that if the government stops funding it, no one will. I mean is it really true to think that if the federal government stopped funding Amtrak there won't be any trains, there won't be planes, there won't be parks? No, of course, not.
In fact, I mean, most of that stuff happened before the federal government got involved.
STOSSEL: Who funds it?
DE RUGY: The private sector, and there is a lot of functions actually that should be pushed down to the states as we saw earlier. I mean, education, transportation, there's a lot of Homeland Security activities that should not be funded by the states and that's the reason why we have so much spending because the federal government doing it all.
STOSSEL: And speaking of cuts, the private sector does it all the time. Yahoo! Cut 10 percent, Cisco 10 percent, Texas Instruments 12 percent. I mean, most companies are still doing well.
DE RUGY: I've cut my shoe budget dramatically the last two years.
GILLESPIE: Well, the point is is that if the companies don't cut they go out of business, the government doesn't go out of business, which why we really need to restrain the spending. And we need to recognize that what we're talking about is essentially keeping things even and the revenue will be there. If we keep spending like we have been, we're just going to be blatto (ph).
DE RUGY: We can balance the budget, just by reducing the speed of growth and that...
STOSSEL: One for the future by doing that. Thank you Veronique and Nick.
Coming up, Ron Paul. In the presidential straw poll at the big conservative conference last week, we beet Mitt Romney and all other probably Republican candidates. He'll be here to tell us about his new idea that you could opt out of most taxes.
But next, if the free market can accurately predict the next terrorist attack, why would the government want to ban that ?
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STOSSEL: What if we had the technology that could predict the future? We could use it to predict threats to our safety, that would save lives. Companies could use it to decide where to start a new store or launch a new product. But actually, we already have technology like that, it's called the prediction market. This is the biggest one, it's called Intrade.com, here people bet on future events and make or lose money depending how well they predict because bettors have to put their money where their mouths are, they have plenty of incentives to get the predictions right.
And sure enough, when I compare the track record of the brilliant pundits around here on television, and the professional pollsters, too, verses the bettors on Intrade, Intrade's predictions have the best track record.
Now, Intrade's based in Ireland because of it were in America the owners would be in jail, silly American politicians have banned Internet gambling. Right before they banned it, the Defense Department planned to set up its own prediction market. The Defense Department thought it would be a good way to predict security threats, but then as usual, politicians did something stupid . They did it to Robin Hanson who worked for the Defense Department at the time and now he helps design prediction markets for companies.
So, what did they do you?
ROBIN HANSON, GEORGE MASON UNIVERSITY: We had a research project and we were going to predict political trends (INAUDIBLE). We were going to predict coos, revolutions like we saw, wars, changes in the economy. This was a research project and it was going to go forward and...
STOSSEL: Let's back up. The Defense Department hired you to do that because why would a prediction market be better at doing that than all those geniuses at the State Department?
HANSON: A prediction market would tap those geniuses. At the moment, the geniuses know things they don't always tell superiors.
STOSSEL: Because they're sucking up?
HANSON: Yeah, big bureaucracy, they tell people what they want to hear. They don't always tell them what they really think. The way to get people to say what they really think is to have them put something on the line and give them a little anonymity, so they can't be told on.
STOSSEL: So the Defense Department announces it's going to do this and Senator Ron Wyden says it is grotesque and ridiculous and they shut it down.
HANSON: Yeah, well it somehow it did not look good, people didn't like the idea, maybe betting on things that might be bad, but it works. Betting on stuff works to tell you what you want to know. And we really want to know which of these things are going to happen.
STOSSEL: And you've moved on to working with companies, for example, well give an example of how companies use this.
HANSON: A couple years ago Best Buy was competing Circuit City for dominance in the electronics distribution market. There was a key question of which would win HD DVD or Blu-ray, for the format. Circuit City went with HD DVD, and Best Buy went with Blu-ray in part because they had a prediction market to tell the to go with Blu-ray. And guess who's still in business?
STOSSEL: Circuit City's out of business, Best Buy is still in business. And one other example of how accurate that is comes from the show "Who Wants to be a Millionaire," that you have a choice between, you can ask the expert, a friend, it could be a real specialist, or you ask the audience and when you ask, phone a friend and they get it right 65 percent of the time. If you ask the audience, audience gets it right 91 percent of the time.
HANSON: Asking an expert is a great idea if you know the right expert, the problem is you often get it wrong. Asking a broad audience can tap into some people out there who know something, but even that's not as good as a prediction market which asks the people who actually think they are experts. Prediction markets aren't just a survey where everybody speaks up, you say who really knows and you're on the line. If you're wrong it'll hurt you, if you're right it'll help you, so people shut up when they don't know and they speak up when they do.
STOSSEL: If they're betting their own money, the people who are really pretty certain they're right are going to bet more and have more influence.
HANSON: And that's how it works in every financial market, you know. Anybody in this audience or on TV could go trade the orange juice futures today, if you want. Why aren't you speaking up about that ? It's your God given right. Because you don't think you know anything. It's good that you don't speak up. Same way for the rest of these prediction markets, lots of people can speak, the people who do speak up are the people who know.
STOSSEL: Thank you Robin Hanson.
Coming up, Ron Paul and self-driving cars and a new place to live with less government. But next, the Internet, will it stay free or will control freaks strangle it?
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STOSSEL: Now, a new section of our show I call "Boring...but Important," and I need help on this one, so we called out the cartoon bears.
(BEGIN VIDEOTAPE)
FEMALE BEAR: Did you hear about the Internet?
MALE BEAR: Yes. It's nice. I use it to watching videos of kittens and a double rainbows. Why? What has happened to the Internet?
FEMALE BEAR: Evil corporations scheming to get rid of net neutrality.
MALE BEAR: What is net neutrality?
FEMALE BEAR: I don't know. But corporations are evil. We need regulation to keep the Internet free and open.
MALE BEAR: It is already free and open. Why do we need regulations?
FEMALE BEAR: Because corporations are evil.
MALE BEAR: You are boring me. Let's watch videos of kitchens and a double rainbows.
(END VIDEOTAPE)
(LAUGHTER)
STOSSEL: Thank you bears and by the way, we made that the video. It's a Web program anyone can use to put in anything for the bears to say. The Internet has changed the world and it happened without government regulation. OK, Defense Department research helped create the first intranet, but makes today's Internet valuable are all the end users, all of you creating stuff without having to get permission from anybody.
But now, the FCC, the Federal Communications Commission has declared we must have, what they call "net neutrality." This is boring but important part, our expert on this, Peter Suderman of "Reason" magazine says this is important and this is not boring.
So, what's net neutrality?
PETER SUDERMAN, REASON MAGAZINE: So net neutrality is the basic idea, it's the principle that each bit and byte on the Internet that passes over the web of wires and servers that makes up the core of the net, should be treated equally. And in principle, this is a pretty good idea. It's a basically good idea. The problem is when the government decides that it wants to enforce this...
STOSSEL: Occasionally, the company will slow somebody's stuff down to keep things moving for somebody else. They say that could mean they discriminate against FOX BUSINESS or ideas they don't like or companies they want to crush.
SUDERMAN: So, there are times when you actually want Internet service providers to be allowed to prioritize. Think of telemedicine, you've got a doctor, he's sitting in Atlanta, he's performing surgery on somebody who's in New York or L.A., you absolutely want every bit and byte between you and that doctor to be prioritized, to have first priority over say, cartoon bears. Whatever it is you want those things to be more important and you want ISPs to be allowed to offer that service. What you don't want...
STOSSEL: They might say you going to operate on somebody, you want to make sure it's flowing, pay a few bucks more.
SUDERMAN: Right . In every other instance in which we have a communications network, whether we have UPS, whether it's the postal service, whatever it is, you can pay more for the premium service, this is guaranteed to be delivered at a certain time and so what the ISPs ought to be allowed should to offer is premium services like this. And what they...
STOSSEL: Because your postal example is a good. We used to just have the post office, and you had one service, same price, all of it slow and lousy, but only when FedEx came in and said we'll charge more, we'll get there overnight, that gave use more choices.
SUDERMAN: That's right. This is -- these are the virtue of competition. And so what you have here is on the one hand, you have competition between Internet service providers, companies like Comcast or AT&T or Verizon who deliver your information from your hand-held device or your computer to some other Web site out there. And that competition is going to produce, I think, a lot better Internet then and FCC, a federal government deciding which innovations, which inventions are going to be OK and which ones aren't.
STOSSEL: But they just say we're going to stop unreasonable discrimination.
SUDERMAN: Right, and every time they say they're going to stop something that's unreasonable, what they're really saying we want control. Because what that does is it gives the FCC discretion. And now discretion sounds good because it allows them to be magnanimous and to allow some services that may not be perfectly net neutral to go through and maybe just stop the bad ones, but what you don't want is a federal agency getting to decide which business practices are the good ones and which ones are the bad ones because that inevitably leads to favoritism.
STOSSEL: And it creates mother may I culture where if you're going to innovate, you have to get permission first.
SUDERMAN: Right. That's what this is really about. It's about on the one hand you've got the federal government and federal bureaucracy that is asserting control over the Internet, perhaps the most important technological invention over the last three or four decades. And on the other hand, you've got companies that want to be able to innovate without having to ask permission from the federal government first.
STOSSEL: Because if they have to ask permission, it slows the innovation down.
SUDERMAN: That's right. The chilling effect.
STOSSEL: We don't want that. Thank you, Peter Suderman.
Coming up, Congressman Ron Paul has an interesting idea, allow people to opt out of government handouts and if you do, you just pay the 10 percent flat tax. He'll tell us about that, next.
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REP. RON PAUL, (R) TEXAS: Would you consider opting out of the whole system under one condition. You 10 percent of you income, but you take care of yourself. Don't ask the government for anything.
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PAUL: I said 10 percent to get the government off our backs, and it turned out to be a pretty popular suggestion. You could not get medical care or free education, anything, but you would be left alone.
STOSSEL: You don't mean to say you wouldn't get medical care. You would get it, but you would pay for it yourself.
PAUL: Right. You are not dependent on the government to say the government owes me medical care, education, house, a food stamps and on and on, this responsibility back on to the individuals, why was pleased the young people were very responsible.
STOSSEL: The idea was well received because he went to win the presidential poll and got 30 percent Mitt Romney came in second with 23 percent and everybody else got much less. So hardcore of libertarians and conservatives like you but the media not so much. Here is an article about your proposal Ron Paul pushes financial crack, 21 year-old's are not responsible enough to opt out. What is your answer?
PAUL: Do they want to depend on the responsible people in Washington or the monetary system or state department and foreign policy? And I would say there is a lot more responsibility out of Washington. You know, was well as anybody people are more responsible been spending their own money than politicians there totally irresponsible if they resort to taxation and regulation and turning up money, they are totally irresponsible.
STOSSEL: Another criticism from Joe Klein's blog? What if your business collapses or your spouse has a chronic disease and on the of free radical enterprise system how do survive?
PAUL: How did they survive before 1965 when the government started getting involved? That is date of government does not do it day reject the whole idea of freedom. Freedom is for much more successful the idea that government can do it. It is a terrible idea and it depends on for us. And it's force for the government to do this and redistribute wealth.
STOSSEL: But Joe Klein says we have consented to in our country we have consent of the governed with the pension plan of Social Security and Medicare and Medicaid and to the FDA and EPA and IRSs and o shut and rejected the 10 percent offer. Your response?
PAUL: I don't know if you consented but that made my point maybe just to get all the of the system was so popular because they haven't consented and feel forced by came to light with the last medical care Bill. That was not dramatically different people who don't like the mandate on Obamacare, isn't there a mandate on Medicaid and Medicare? We pay those taxes all the time even local governments like to tell you what you can eat or drink. I am for getting rid of the mandates.
STOSSEL: Let's see with our audience agrees. How many of you would opt out if you have the option? Pay 10 percent? About half of you, and high school students say no. Who says no?
UNIDENTIFIED MALE: How do think this will benefit high school students who are dependent on financial aid going to college?
PAUL: I did not have financial aid. You would have jobs in a free society, prices would be lower, I only had to pay $300 per semester I had to learn that money during the summer. It gave me self-respect. Somebody thinking I cannot get anywhere unless the government takes care of me is so sad.
UNIDENTIFIED MALE: What about the federal programs that you cannot opt out like the federal highway system?
PAUL: That could become the user fees system theoretically that is what it is supposed to be. We pay a tax and they should come back to build our highways. But if they are spent into general revenue then you have to get involved in politics to get the money back to build your highways.
STOSSEL: You would not opt out of defense our basic functions of government?
PAUL: No. It is clear in the constitution but I am sure 10 percent, you could have a very adequate defense. You would not have all of the militarism and occupations but the adequate defense. And also the private property and contracts are important so that is what you would pay for with your 10 percent.
UNIDENTIFIED FEMALE: Have you given thought to how this program could be administered? It sounds like opening a whole new bureaucracy.
PAUL: I think it would reduce the bureaucracy. Just sign a paper, I opt out. Then you do not qualify you cannot get through stamps but you can keep the 90 percent of everything you earn for the rest of your life. Wow.
STOSSEL: Here is a question from Facebook page what gets covered under the 10 percent flat tax? Social Security or Medicare? Amtrak and post office?
PAUL: The post office is still legitimate under the constitution. That is a shame because they are losing a lot of money.
STOSSEL: The last point from Facebook on a 10 percent is they never got it should be good enough for government at another one says they do not deserve 10 percent.
PAUL: That's why I had to qualify I don't want any income tax eventually.
STOSSEL: Thank you Dr. Ron Paul.
When we return, if Congress does not take Dr. Paul's advice should go Galt, move offshore? Are man-made island city's the wave of the future?
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STOSSEL: Despite our unsustainable deficits the president wants to spend, I mean invest, billions more of your money with high-speed rail. Trains are sexy and people like them if they could only take you to where you want to go, but they rarely do.
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STOSSEL: And it is the reason Randal O'Toole says Obama's investment would be a waste because the cars that drive themselves are the future. You can read about in the book gridlock and even with a more radical vision is the founder of the sea steadying institute like platforms like this instead of homesteading and we will get to his idea in a minute. But Randal, I will start with you. Cars that drive themselves?
RANDAL O'TOOLE, "GRIDLOCK" AUTHOR: We already have all of the technology to allow cars to drive themselves. They can use enhanced the GPS technology, locate within two centimeters', pedestrians, traffic lights, laws, of the cars or the process is much faster than the human brain. Because it is faster you have far fewer collisions them less traffic congestion.
There is a lot on the books that requires a human driver at the wheel so Google has tested this, Volkswagen they have driven them thousands of miles on the highway and have not killed anybody and you can buy a car today that will steer itself on the highway and park itself, avoid other cars and prevent collisions all by itself and it is not expensive. The Toyota Prius will do it.
STOSSEL: It is just against the law. Computers have a faster reaction time. You argue in said of high-speed trains you could put many more going faster and it is better.
O'TOOLE: We should get three times as many cars on the existing infrastructure which means you don't have to build more just maintain.
STOSSEL: People think trains as energy efficient.
O'TOOLE: Amtrak trains are not that efficient they are diesel powered using the same petroleum and emit lots of pollution and the average car on the road today intercity traffic using less energy than Amtrak.
STOSSEL: And high-speed rail cost five times as much as flying or driving.
O'TOOLE: I came from Washington D.C. Amtrak wanted $139 I wrote the make a bus $8.
STOSSEL: Patrick Friedman, platforms in the ocean?
PATRICK FRIEDMAN, SEA-STEADING INSTITUTE FOUNDER: We want people to have new forms of government. No technology advances unless you can try new things just like the political system.
STOSSEL: This would allow a few people to experiment to see what works best?
FRIEDMAN: As of arguing about what will work without seeing it in practice let budget groups put their ideas to practice and allow reality decide.
STOSSEL: Right now government's control the land so you need a new place for you would not start with platforms but big ships?
FRIEDMAN: Anybody who was been on a cruise ship is a floating city it has 6,000 people plus the crew supply food and power and water.
STOSSEL: They have to obey the laws.
FRIEDMAN: There is a lot of regulatory freedom on the motion under existing international law.
STOSSEL: Anybody signing up?
FRIEDMAN: We do have a question that says we do not have a condo yet because do not ask us to buy them people are ready.
STOSSEL: Will you move to one?
FRIEDMAN: My wife says once it has a few thousand people.
STOSSEL: You think this will have been?
FRIEDMAN: We have raised almost $2 million in three years. It is a long shot like any startup but we are taking it because of it works it will completely transformed government. Instead of the complaining about how the government works we can compete with it. It is the entrepreneur's way to fix things to do something better.
STOSSEL: And there is a Dutch abortion in the ship?
FRIEDMAN: Women on Waves goes around to where abortion is illegal it goes into port and people get on board of pass the 12-mile limit of course, the number is not performed but it is the conversation about what is or is not allowed. Some ports have blockaded their ships but they have never said it is illegal to do what you do there under Dutch law and fly the Dutch flag.
STOSSEL: Would you consider moving to sea stead? Do you want juice stand up now? Do you have questions for either gentleman?
UNIDENTIFIED MALE: Living on a platform on the sea? What about weather conditions?
FRIEDMAN: That is the engineering challenge so they can withstand the weather and the waves but it exists with oil rigs and cruise ships we need to make it more comfortable and expandable and cheaper.
UNIDENTIFIED FEMALE: You're saying government is different on the sea. What happens when government starts developing there and regulate? Will be different?
FRIEDMAN: That's a great question. What sea-stead does is creates a start of sector for government. Right now the government and industry is a cartel. Nobody with a good idea can start a new one. In a healthy industry people constantly try new ideas come Mr. Accompanies and the pressure if T-Mobile does not keep up with Verizon does not lose customers if we create a world where people can start a new countries all the time, we will get constant improvement that we don't have today.
UNIDENTIFIED MALE: I have come to except our would never be able to afford oceanfront property. How affordable will this be?
FRIEDMAN: At the beginning it is about $300 per square foot, which is about what it cost me to live in the San Francisco Bay Area and technology could bring their price down prick and a reason to think in 20 years it could not be as cheap as living on land.
UNIDENTIFIED FEMALE: Since we have the technology do you think in the future we have cars that fly?
O'TOOLE: That is a different problem also with air-traffic control and we don't have the system to make that work. It also requires a lot more energy but the advantage of the driverless car we can use the existing infrastructure of our highways system. Everything is on board the car they deny require any sensors in the road.
And we have driverless cars today. In California, Germany, those that are on the road on the experimental basis and so far the only accident is when somebody rear ended one because it stopped at a stoplight.
UNIDENTIFIED MALE: Bill Gates designed it on Windows 95, it crashes all the time. How can we make it more reliable?
O'TOOLE: I suspect three or four different operating systems and you can pick your choice. And every night your car will put itself up to your internet wireless system to download any upgrades automatically so the next day you will have the latest technology on the road.
STOSSEL: Thank you Randal and Patrick. Good luck.
Coming up, the revolution in Egypt and what that says about our future.
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STOSSEL: Tonight we offered visions of the future and thought experiments. We try to be a jungle gym for the brain. Some ideas were dumb and I trust this will not be part of my future. But let me poll the audience. How many of you would choose to sea-stead now that you have had time to ask questions? A few.
How many of you would accept Ron Paul's idea for the opt out to pay 10 percent a do not get free stuff from the government? The adults, yes, and yes and the high school students no. How many would drive the self-driving a car? I guess you would not really drive it.
That is the idea I find most appealing I had no idea they are available now and could be speeding up traffic today if government would get out of the way. But governments don't get out of the way.
That is the reason we are deep in unsustainable debt with so many programs that don't work, waste, and piles of rules and more than anyone can understand. This is just what the fed passed last year, 80,000 pages, and local governments add on even more and most politicians want more rules and spending. They think they are not doing their job on less the proposed more for the state to do.
I reported on the rankings of countries comparing nation's according to economic freedom? This is the one from the heritage foundation and the United States top of the list has fallen to number nine because Bush and Obama grew government so much.
But countries near the top of our prosperous part of these are good places to live compared to these countries compared to those at the bottom of economic freedom ranking with a lot of state control. You do not want to live in those places. This is what the government gets you an idea. And yet when there are problems, politicians instinctively say more government is the answer.
There ought to be a lot but the opposite is true. This month as protesters took to the streets discovering one more reason why we should want less government in our future. In a column entitled "Is Egypt Hopeless?" the "Wall Street Journal" looked at the unemployed Egyptian young people and said it is not just a sad story it while Egypt floundered Turkey's economy flourish. Both have a strong Islamic presence how come Turkey thrives while Egypt does not?
Because in Egypt 35 percent of the working population works for the state but in Turkey just 13 percent. The bigger the public sector the worst countries do.
Look at other countries that enjoy economic growth. Singapore, Japan, India, and even China, 8.3 percent, have relatively low public employment. It's also true in South America, Columbia, Peru, and Chile have public employment below 15 percent.
A low number doesn't guarantees strong growth, but a high number may kill it. Where do we fall? And the United States 16 percent of workers are employed by government, slightly worse than Turkey and Columbia but at least better than Egypt. So shrink the state. Let's have our future include self-driving cars and the Internet that is free. Was not become Egypt. Prosperity comes from a growing private sector. Let's have that be our future, not government.
Thank you and goodnight.
(APPLAUSE)
END
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