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CNN IN THE MONEY

The Costs of War in Iraq; Americans Say Economy is Strong While They Don't Approve of the President; Debt Ceiling Inceases

Aired March 18, 2006 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FREDRICKA WHITFIELD, CNN CORRESPONDENT, IN THE MONEY: And here is that look Iraqi security forces discovered 16 bodies today in six Baghdad neighborhoods. Reports say the victims were shot in the head and showed signs of torture. No word on their identities, but they may be victims of continuing sectarian strife.
The U.S. navy says two of its ships exchanged gunfire with suspected pirates in the Indian Ocean off the coast of Somalia today. Pirate attacks are not uncommon in that area. One of the suspected pirates was killed, however, but no one was hurt aboard the U.S. navy ships. The "USS Cape George" and the "USS Gonzalez."

Across France, huge crowds of protesters, including college students and union members take to the streets to demonstrate against a new labor law. The protesters fear that law will undermine job security for young workers and they are trying to pressure the conservative government into canceling that law.

Those are the headlines. More news as it happens. Now IN THE MONEY.

ANNOUNCER: From New York City America's financial capital, this is IN THE MONEY.

JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, your tax dollars at war. It's the third anniversary of the invasion of Iraq. We'll take a look at what's it's costing and whether the price is going up.

Plus, green acres. Most Americans think the economy is doing great, even though the president's ratings are in the basement. See if the country is riding as high as it thinks it is.

And need versus greed. Meet an author who went cold turkey on frivolous shopping. We'll find out if a year without impulse buys is a year without much joy.

Joining me today, a couple of IN THE MONEY veterans. "Headline News" correspondent Jennifer Westhoven and Money.com managing editor Allen Wastler.

So the stock market continued to rally last week and is now sitting at five-year highs. Do we have an economy and corporate profits that justifies these stock prices these days?

JENNIFER WESTHOVEN, "HEADLINE NEWS" CORRESPONDENT: I think it's incredible. You can't say that the Nasdaq has come up so much too. It's only about half of where it was. We don't have signs of a bubble out there and a lot of the big blue chip companies have been doing well with corporate profits.

ALLEN WASTLER, MANAGING EDITOR, MONEY.COM: As bull markets go, this one is a little boring. None of the excitement we've seen in previous ones.

CAFFERTY: But isn't that the kind of market over time that you can make some money on if you are an investor.

WASTLER: If you are an institutional investor or someone who is just going very slowly for the growth. We're not seeing the mom and pop action, the Internet active crazies coming in. That hot money is not there. We're beginning to see a little bit of a trickle. Since I run a site that is very good for those kinds of people, you should check that out. I'm not seeing the excitement we've had in the past.

WESTHOVEN: I think it's just as exciting when you see those big green arrows on your own brokerage account or your Fidelity account.

CAFFERTY: One of the potential flies in the ointment is the Fed. We have Bernanke who is the replacement for Allen Greenspan there is a lot of speculation on whether they are about finished raising interest rates. Interest rates can kill a stock market if they don't stop early enough.

WASTLER: Uh-huh. I think they will, though. He's been handed the script by Alan Greenspan saying follow this and you won't go wrong. So I think that it's pretty much cooked into the cake already.

CAFFERTY: Optimistic?

WESTHOVEN: I'm not so worried about interest rates. We've had low interest rates for a very long time and they've helped companies come out potential trouble spots. Things have been good for a while.

CAFFERTY: We will keep track of that along with all the other issues we are following. Nobody said the fight for freedom comes cheap. In Iraq it's costing the U.S. hundred of billions of dollars. This weekend marks the third anniversary of the invasion. The Pentagon's reportedly leaning harder all the time on air power in both Afghanistan and Iraq. Case in point, this week's aerial assault aimed at rooting out insurgents around Samara. Billed as the biggest air offensive since the war began, stuff costs money.

For more on the price tag we turn to Douglas Holtz-Eakin the director of the Marise Greenburg Center for Geo Economic studies at the council on foreign relations. He is also the former director of the Nonpartisan Congressional Budget Office. Nice to have you with us.

DOUGLAS HOLTZ-EAKIN, COUNCIL ON FOREIGN RELATIONS: My pleasure.

CAFFERTY: Put the almost half a trillion cost -- dollar cost of the war in Iraq into some perspective for us if you can. It's a huge number, but we live in a $10 trillion economy. How much is this thing costing us relatively speaking?

HOLTZ-EAKIN: Well, if you pro rate it on an annual basis, something between one and two cents out of the national dollar. The operations in Iraq and Afghanistan are not something which is an enormous tax on the economy the size of the U.S.

WESTHOVEN: Can you talk a little bit more about this as a price tag, though? There's a lot of different ways of measuring how much it costs to be at war in Iraq and I feel like it's the kind of thing that those numbers get so big it can be really hard to understand. So, you know, maybe you want to put that into how much it costs per person or what kind of things as a country we're giving up as we pay for this war.

HOLTZ-EAKIN: One of the things we're giving up is the chance to cut our budget deficit in half at the federal level. We're going to run a deficit about $300 billion and $350 billion in 2006. We're giving up the chance to make substantial inroads on that. The Senate just passed a budget resolution where they really went tooth and nail at each other over another 10, $16 billion worth of spending. The budget pressures are showing up in all parts of activities, and the war is one of them. In the absence of those costs, we have a little chance to do things elsewhere. It's a substantial investment by the United States in this.

WASTLER: Doug, with the latest operation "Operation Swarmer" it seems like they are bringing in more air assets and things that seem, gosh, that should cost a lot. Is there any point where the costs are going to level off where they've gotten enough technology and equipment there that will see a leveling off in the cost? Sort of like you see in a major corporation once it's done enough investment?

HOLTZ-EAKIN: I think we've seen the bulk of the cost. Even the air power that's now being deployed in the most recent operation and if it were used more extensively for the duration of U.S. activities there, it's not going to change the basic price tag. We've been looking at something that ramped up to cost about $8 billion a month. The additional air power of the type that we saw this past week costs you on the order of $10 billion a year.

So this isn't a big increase in the cost. The costs are putting the troops over there when you have 150,000 180,000 troops and the supply lines necessary to keep them in good fighting form. That's the big cost.

CAFFERTY: You mentioned the war in Iraq. We didn't mention hurricane Katrina and part of the recent spending resolution included additional billions of dollars for hurricane recovery along the Gulf Coast. It's your feeling that it's the right strategy to continue to assume debt for these kinds of things. Give us your thoughts as to why.

HOLTZ-EAKIN: The standard rule is you should pay for, using the tax system, the ongoing costs of government. And so we have ongoing costs in the form of social programs, Social Security, Medicare, Medicaid, highways and the like.

A tax system should be configured to pay those bills. If things happen that are unexpected and are one time in nature and a hurricane is by definition something like that. It's sensible to spread those costs out by borrowing the money at the time and then repaying over the long term. That's not a terrible strategy. The difficulty is it's been layered in the U.S. on top of an unwillingness to keep the scale of government down and to pay the bills for this larger scale of government. So we really are in a bit of a bind.

WESTHOVEN: What do you make as somebody who used to be at the congressional budget office, used to oversee every dollar that the federal government spent, what do you make of this move that they just did to raise the debt ceiling?

HOLTZ-EAKIN: The debt ceiling goes up for two reasons. The first reason it goes up is we are not balancing our books and we go out and borrow from the public, including internationally. But it also goes up because there is some debt within the government. The Treasury gives debt to the Social Security administration, for example. That's about half of it and increasing the debt limit to accommodate that is not an economic issue. It's an accounting issue. Increasing the debt limit in order to finance the government over the long term is an issue, and it reflects the fact that we do not have our fiscal house in order and it will be the most pressing issue we face in the years to come.

CAFFERTY: Very quickly, because we're almost out of time. The other side of that argument is people say, oh, the deficit is a very small percentage of GDP, not to worry.

HOLTZ-EAKIN: Don't worry today but that's like saying, oh, well, things are going good. We're driving 60 miles an hour on a nice flat road but there's a cliff a mile ahead.

CAFFERTY: That's a good analogy.

HOLTZ-EAKIN: In the future the deficits aren't going to be something you can shrug off. We're on track if we don't change the way we spend money to really overtax this economy. Some fundamental house cleaning is in order.

CAFFERTY: All right. Douglas Holtz-Eakin thank you very for joining us, nice to have you with us. Formerly with the Congressional Budget Office, council of form relations.

When we come back on IN THE MONEY as we continue bushwhackers. The president is taking a whooping in the polls, but most Americans think the economy is doing pretty well. See if we're a nation of optimists or if we just don't get it.

Plus, drastic plastic. We will hear from an author who spent a year only buying things she absolutely needed. Are you listening, Mrs. Cafferty? Here's your chance to find out if you admire her or pity her. I know she's not. That's why I can say that.

Later, for love and money. If you want to touch off a marital brushfire, like I may have just done, try bringing up spending. Look at what a new survey says about that.

(COMMERCIAL BREAK)

CAFFERTY: Remember that old Clinton campaign mantra, it's the economy, stupid? The current administration might want to think of adopting it as theirs. It's just about the only thing going right for the president these days, according to the latest CNN/"USA Today"/Gallup poll. The president's approval rating is at an all-time low of 36 percent. Yet 59 percent of Americans say the economy is in pretty good shape. Is it really or are we just trying to find a glass that we think is half full? We're going to find out now from Mark Zandi who is the chief economist at Moody'seconomy.com. Mark nice to have you with us.

MARK ZANDI, CHIEF ECONOMIST, MOODY'SECONOMY.COM: Thanks for having me.

CAFFERTY: They say elections are always about the pocketbook, that people vote the economy. That if I have a job, I've got a few bucks in the bank, I can afford to put my kid through college my chance of voting for the status quo are pretty good. On the other hand President Bush has real problems in his popularity with the American public. Put that stuff into context of this upcoming midterm election if you can.

ZANDI: Well the economy is performing well, lots of jobs. Profits are as high as they've ever been. The problem for the president is that the benefits of the strong economy aren't accruing to enough people. High-income wealthy households are doing quite well, about as good as you can expect. But lower income and poor households are still struggling and having a hard time just keeping up.

WESTHOVEN: OK. So we were just referencing that of course, famous James Carville line, it's the economy stupid. If the economy seems to be doing pretty well by a lot of the numbers out there and yet you are talking about a lot of people that aren't feeling it, is there something that trumps the economy? Is it housing prices because people think they are going to be weak? Is it gas prices? What can we look at to get a sense? It's the economy stupid is that wrong?

ZANDI: Well, no, it's dead on. It's really three things. Do you have a job and is your pay increasing? For people in the bottom half of the distribution of income they may have a job but their pay certainly isn't increasing. It's not keeping pace with inflation. That gets to the second thing and that is gasoline prices and they are still very high. The prospects are that they will rise through the spring and summer as the driving season kicks in.

The third thing is many people are now starting to look forward into the future, into their retirement. We're all getting a little bit older and thinking about retirement. The president brought up Social Security last year and said it's a problem that it's going to be broke but he hasn't offer up a solution or more specifically hasn't got a solution for it. So all those things combined have people worried.

WASTLER: Mark, you mentioned jobs. And the numbers I've seen lately seem to be saying the job picture is improving a little bit. That would imply that pretty soon the worker will have the leverage with the employer to maybe up those wages a little bit, which would seem to be good generally, unless you are worried about inflation and good for the White House in terms of the midterm elections.

ZANDI: You know, I think that's right. I don't know if it's going to come in time for the midterm election, however. The job market is much improved. The unemployment rate now is below 5 percent. That's a pretty good benchmark for strength in the job market. Workers are regaining some negotiating power. But you know folks with lesser skills and education, people that are working in lower paying jobs, you know, they don't have much leverage and I don't think they'll gain enough leverage and feel good enough about things this year. It may not be for quite some time before they feel more comfortable with what's going on.

CAFFERTY: A lot of good paying jobs have been outsourced and sent overseas. President Bush gets the blame for a lot of that, whether he is responsible directly or not. Almost doesn't matter. The question I suppose is, if you buy the idea that the economy is not too bad, it's pretty good, and employment figures are decent. Does the economy have a chance of overcoming the widespread dissatisfaction with the administration's policies on almost everything else come election time?

ZANDI: You know, I think that's going to be tough. The reason why is the economy is right now about as good as it gets. We're creating a couple hundred thousand jobs a month. That is as strong as it is going to get for quite some time.

Interest rates are going to tick higher. Inflationary pressures are still there. I just don't see the economy being in a better place six months from now than it is today. So I think it's going to be tough for the economy to lift the president high enough to overcome some of his other obstacles unless those other obstacles become less problematic.

WESTHOVEN: All right. I want to move along a little bit to the deficit. Yesterday we saw Congress raising the debt ceiling from $6 trillion to $9 trillion or at least -- I'm sorry, I think that's happened over the course of the Bush administration. But they did just raise the debt ceiling yesterday now or this week to $9 trillion. It used to be that when this happened, there was a giant uproar and people talked about whether or not the government was going to come to a standstill, would it default? Now it seems like the government is just upping a credit limit. Are you concerned about that?

ZANDI: That's very unfortunate. We're not really feeling the pain yet of our fiscal problems. Interest rates are still very low for reasons that are completely independent of what we're doing here in the United States in our own fiscal situation. But I do think, as time rolls on, and as these deficits grow in size, this will be our number one economic problem. It will be a significant challenge. Probably not for President Bush, but certainly for the next president. And we are going to feel this pain at some point. So it's very disconcerting that we don't treat events like the raising of the debt limit that ceiling limit, in a more serious way.

WASTLER: OK, Mark so real quick. We only have a few seconds left. What should be done right now? Boom. What should they do? ZANDI: What should the president do?

It's baked in the cake. There's not much he can do at this point. I suppose they could get some of the tax cuts they want through passed like the capital gains dividend income tax reduction. That may help a bit. There's not much the president can do that will affect this economy by Election Day.

CAFFERTY: Mark Zandi is the chief economist from Moody'seconomy.com. Mark nice to have you with us. Thank you.

Time for this week's look ahead and here it is. On Tuesday, the Labor Department will release data on the producer price index. PPI, measures inflation at the wholesale level it's something the Federal Reserve watches very closely.

Later in the week, the real estate picture may become a little clearer. On Thursday, February data on existing home sales will be released. And Friday, new home sales also out for the month of February. So stay tuned for all of that.

More to come on IN THE MONEY, coming up next, a wing and a prayer. We will look at whether bird flu is hurting the shares of Tyson Foods.

Also ahead, playing the back nine. See if Americans at retirement age are picking the golf course over the workplace.

And living hand to mouse. Find out what can happen when you take your job a little too seriously. Something that never occurs around here. That will be our "Fun Site of the Week." Stick around.

(COMMERCIAL BREAK)

WASTLER: New reports of avian flu in Europe and Asia and a case of mad cow in the U.S. have made some investors a little queasy. Many are turning their nose up at shares of related companies like top U.S. meat producer Tyson Foods. The stock is down more than 20 percent this year alone. And it's dropped more than one-third over the last year.

Is this a case of investor panic? Or is something else at work here? Tyson Foods is our "Stock of the Week." And this is reminiscent of the whole low carb thing; remember that and everybody was like all the bakery companies are going to -- and some of them did. Some of them didn't. But it shows you perception in food affecting the revenue base can really play havoc with a company.

WESTHOVEN: I'm amazed that Americans at this point are really fairly unconcerned about; let's just even talk about mad cow. We've got two things going on here. We've got the bird flu and then mad cow disease. A lot of other countries are really worried about it. We have other countries that don't want to take our beef anymore.

CAFFERTY: Well if Americans are unconcern it's not because we haven't been doing our part in the news media. We fanned the flames of fear about this stuff. You read it in the newspaper. It's all over the Internet; it is on radio and television. Realistically, bird flu has killed fewer than 100 people in the world in the last three years. That's not to say it couldn't change tomorrow but is the decline the price of shares like Tyson Food justified by the effect the disease has had?

WASTLER: Well, I think what's at play here is as Jennifer mentioned, the export market is very critical to these outfits. They just got those markets opened. There was a mad cow scare in 2003, some of them closed. Now they are opening back up. That's where they are going to get the growth from, overseas markets. You are looking for growth in the stock to help pump up the value. That is where the real concern is, it's agreed there's a perception thing and we fan the flames because that's what we do.

WESTHOVEN: They are selling all the chicken now for cat food because other countries won't buy it.

CAFFERTY: The other thing that American companies at least, some of them are doing is they are instituting these very strict security measures around the plants. We did a piece here on CNN of a huge chicken producer, I think, in Pennsylvania. I mean, you got to put on biohazard suits and pass through detectors. They are very concerned about sanitation and cleanliness and not contaminating these buildings that have hundreds of thousands of little chickens in them.

WASTLER: Yes they are taking steps.

Here's my view of it. Right now the stock is cheap. You just wait until it pounds down a little more. Could be a nice buying opportunity because people will always eat meat.

CAFFERTY: There we go.

WASTLER: There we go.

All right. Coming up on IN THE MONEY, giving up the bling thing. We'll speak with an author who quit buying stuff she didn't need. Find out if she thinks less spending equals more happiness.

And later, play your card right. You can let Social Security plan your retirement or you can do it the smart way.

Plus, chips with everything. We'll look at what could be the future of shopping that is in our "Brainstorm" segment.

(COMMERCIAL BREAK)

WHITFIELD: Hello. I'm Fredricka Whitfield at the CNN Center in Atlanta. Here's what's happening right now. The U.S. navy says two of its ships exchanged gunfire with suspected pirates in the Indian Ocean off the coast of Somalia today. One of the suspected pirates was killed. But no one was hurt aboard the U.S. navy ships.

Across France, huge crowds of protesters, including college students and union members take to the streets to demonstrate against new labor law. The protesters fear the law will undermine job security for younger workers.

A convicted rapist let out of prison early is now behind bars in South Carolina. He's accused of kidnapping two teenage girls and sexually assaulting them in a hidden underground room behind his home.

In southern California, reports of an accident involving three church buses carrying about 90 students. A spokesman with the Los Angeles County fire department says at least seven people were hurt, but none appears to be serious.

More headlines in 30 minutes. I'm Fredricka Whitfield. Now back to more of IN THE MONEY.

WESTHOVEN: OK. Think about all the things you buy. A cup of coffee in the morning, maybe you buy lunch, candy bar, new shirt. It can be hard to imagine getting through a day without buying something. Our next guest did it for a year. What willpower. After holiday shopping overwhelmed her and her credit cards one year, she lived to talk about it and she wrote a book about it. Judith Levine is the author of "Not Buying It, My Year Without Shopping." Judith this morning I actually tried to envision not spending for a year. I looked my closet, I thought about bridal showers and gifts and I didn't imagine how you could of done it. What was the moment when you even though you know I'm going to try this? I'm not going to spend anything for a year.

JUDITH LEVINE, AUTHOR: You know it was Christmas 2003 I had maxxed out my credit cards. I was schlepping in an enormous shopping bag, which I dropped into a slushy puddle. I thought there's got to be a different way.

WASTLER: Judith OK, give us the rules for your program. What did you buy? What did you not buy? What was a need and what was tossed out?

LEVINE: The rules kept changing. But we didn't buy any prepared foods. We didn't buy any CDs or new clothes or new anything. We didn't even buy any gifts. We just made things. And we did buy ingredients for food, insulin for our diabetic cat, Internet access, things that were necessary in our own peculiar life.

CAFFERTY: Give me a sense of the emotional ride you went on. At what point did this become a real sacrifice? At what point did you say, this is feeling pretty good, I'm doing something worthwhile in temptations to just go cash a check for $500 and blow it on Gucci something's. How did that work?

LEVINE: Well, you know it was an up and down ride. In the beginning, I felt a lot of longings. I wanted ice cream. I mean there were lots of things we decided we weren't going to buy. And I got bored, too. I didn't -- we didn't go to the movies. We didn't read any new books. I felt out of it. I felt a little bit stupid. As time went on, I remember the day I went out to take a walk in my neighborhood in Brooklyn and realized I hadn't taken my wallet with me and that felt really good.

WESTHOVEN: You know one of the things I noticed in -- you writing about this. There's a little bit of the personal journey that you take and how it feels for yourself to not shop. But you also really noticed some things that you think are different about our culture because we are so in love with shopping. What do we miss out on when we spend so much?

LEVINE: You know we tend to go out and fix every little personal problem by buying something. If you feel bad about yourself, you feel lonely, you feel bored and you buy stuff. Paul and I were forced out into the world to find our stimulation and meaning and our fun. We went to the public library, went to the public parks, just took walks around the city, we went hiking and we found, unfortunately that those public amenities are in pretty sorry shape. We love the library, but it was closed half the time, and books weren't being replaced that were being stolen. We really felt that the fact that we are spending all of our money, all of our time and all of our passion on personal consumption means that we're not putting our money in our passion into the things that all of us could enjoy and share.

WASTLER: Judith give me the bottom line here. How much did you save off this program?

LEVINE: I paid off almost $8,000 on my credit card and I haven't run it up again. And I think I saved probably about $1,000 bucks in addition to that. And we weren't even trying to save money. We weren't buying the cheapest of the things that we did buy.

CAFFERTY: What's the first thing you went out and bought when this experiment came to an end?

LEVINE: My partner Paul bought a box of Q-Tips. He tells you the humble desire he's has. And I went out and I rented about a half a dozen movies.

CAFFERTY: There you go.

WESTHOVEN: That sounds like fun. You said you slipped a couple of times.

LEVINE: I did.

WESTHOVEN: What did you learn and what did you buy?

LEVINE: Yes, I lapsed. I am also a person who slips to temptation. I bought clothing. I bought a pair of pants in a thrift store and then I bought a pair of new pants. And I felt both bad, a little guilty and also good in that way you feel when you have -- when you are bad, sort of bad girl transgression. Then I had to confess to my partner.

WASTLER: Real quick. How did you handle the gift situation? You said you made stuff. But did people give you the hairy eyeball at parties and stuff?

LEVINE: Well, my niece graduated college during the year and we really wanted to give her a big important gift. So we thought about it. We couldn't buy her a laptop or some luggage. So what we finally did was we took a necklace that my mother had given me that she had bought when she was younger and gave that to Sarah, which was a much more meaningful gift than anything we could have bought. And she really loves it.

WASTLER: There you go. That makes sense. Judith Levine, author of "Not Buying It, My Year Without Shopping," thank you so much for coming by and sharing it with us.

LEVINE: Thank you.

WASTLER: All right. There is a lot more to come up here on IN THE MONEY.

Up next, the long haul. For many of us working past retirement is the fall back plan if you haven't saved enough. See if that is an option you want to live with when the time comes.

Also ahead, hang time. Think smart about retirement. You can do something more fun than flip burgers when you are 70, Jack.

CAFFERTY: That's cute.

WASTLER: And we'll hear about that in our "Life after Work."

(COMMERCIAL BREAK)

WASTLER: Here's plan A, you save as much money as you need to retire comfortably, which means most of us are counting on plan B instead. That unusually means working somewhere beyond retirement age. But a report out from the Census Bureau shows senior citizens quitting the workforce even earlier than 50 years ago. We wanted to find out if that means plan B is a bust. Dr. Michael Smyer is going to help us figure that out. He's the director of the Center Of Aging and Work at Boston College. Professor thanks you so much for joining us.

Dr. MICHAEL SMYER, DIRECTOR, CENTER OF AGING AND WORK: Thanks for having me.

WASTLER: So what about that census report? Why are all the older folks bagging out of the workforce earlier?

SMYER: Well, the census report is a good report as far as it goes. The problem is it's looking in the rear-view mirror rather than looking ahead. But a labor force participation rates have changed a lot over the last 50 years. Starting about 20 years ago, there's been a different change. And that is people staying in the labor force longer than we had anticipated.

WESTHOVEN: I found that hard --

SMYER: And the reason for that -- I'm sorry.

WESTHOVEN: No, go ahead.

SMYER: The reason for that is pretty straightforward. A couple of things have changed. One is the mandatory retirement age has changed in the mid-1980s and second, the sort of contract between employers and employees changed as we shifted from defined benefit to defined contribution pension plans. WESTHOVEN: I found it a little hard to reconcile these numbers. The census report saying that now only one in five people who are 65 and over working. It used to be one in two. If all these people aren't working, we hear so much about the high cost of health care, how much it's going to cost, how much you have to save for retirement. But these people -- are they a little better off than maybe we thought they were?

SMYER: Well, I think when we talk about older workers; we need to think about three groups. One is those who need to work because they need either the income or the health care benefits, and that's about a third of older workers.

A second group is those who want to work because they want to maintain social contact or feel that they are making some kind of social contribution. And that's about another third and then another third of those who are a little bit of both. For example, I have a friend who was a first grade teacher for many years. She retired after 30-some years and now she wants to go back to work part-time, in part because she wants social connection, but also she wants the health care benefits.

CAFFERTY: What about the kinds of jobs that are available to older workers who choose to work beyond the traditional retirement age? Have they changed? Are they getting any better? Are they getting any worse? What about opportunities?

SMYER: Well, I think employers have caught on to the fact that it's in their best interest to make a variety of flexible options available to older adults. They have looked at the demographics and they know they may be facing two shortages. One is just a shortage of workers in general and the other is a shortage of technical capacity or lost knowledge, if people retire in large numbers. So many employers are finding a variety of ways to give people choices.

So for example, Borders Books has a seasonal option. They call their passport option. You can work in a Border's in one part of the country and if you want to spend your winters in Florida, for example, you can work out an arrangement to work part of the year there.

CAFFERTY: What are the implications in terms of the society for people who have not saved enough for retirement and then in the back of their mind are saying, well, I'll just work longer? All of a sudden, health problems crop up; something happens they are not able to do that. The economic implications of the vast numbers of baby boomers, some of who could fall victim to this kind of thing would seem to be not insignificant.

SMYER: Well, it's a really good question. Health is a big issue. But one thing we know from the census report and other reports is that old age is not the same as it used to be. That 65 in terms of health is not what it used to be. And people are staying healthier much later in life. Even those at age 85 and above, a majority is still in good health.

But when you have a health problem that drives all sorts of other things, including your ability to work, but also your concerns about economics. But for older workers facing the work or flexible work part-time work decision, health will not be a big issue until very late in life.

WESTHOVEN: All right. Michael Smyer, thank you so much for joining us. We hope that a lot of people who are able who are retired are able to find those types of part-time jobs that you've been talking about.

In today's "Life After Work" segment, extreme retirement. If you think wrapping up your career means laying low, not for a Georgia couple. Tosh and Bruce Hopkins they are flying high, thanks to some smart financial planning.

(BEGIN VIDEOTAPE)

WESTHOVEN (voice over): Hanging from a kite 3,000 feet above a mountain might scare most people, but not Tosh Hopkins.

TOSH HOPKINS: To me it's very peaceful up there, just floating about with the birds. To some people, it's exhilarating. To me it's peaceful.

WESTHOVEN: Tosh Hopkins and her husband Bruce retired to Georgia's lookout mountain last year. There the Hopkins found a community of hang gliders and a home right on the landing field that lets them fly as often as they want. Bruce Hopkins pilots an ultra light plane and tows his wife's glider up to 2,000 feet.

T. HOPKINS: The airplane will roll down the field there. The winds this way, you will see there's another gazebo at the other end. We can go the other way. It's quite a large field. If there's a cross wind you can come in and land cross wind in your glider. So it's a wonderful place to take off and to land.

I think it's magic. According to the laws of science you, can't take more energy out of something than you put into it. But with hang gliding you, get a lot more energy out than you put into it.

BRUCE HOPKINS: This is a lovely part of the country. We have everything that we like to do here. So it's turning out to be a very nice, ideal retirement location for us.

(END VIDEOTAPE)

WESTHOVEN: Coming up, this little chip went to market. Get a glipse of a future where every product has something to say.

And if you want to say something, sound off about the show this week or you just want to vent, drop us a line the address is INTHEMONEY@CNN.com.

(COMMERCIAL BREAK)

WESTHOVEN: The world's biggest tech trade fair CNET wrapped up this week in Hanover, Germany. At the show, one of the biggest retailers, Metro got to test a new technology that would put a computer chip in everything you buy. Jim Bolden got a closer look.

(BEGIN VIDEOTAPE)

JIM BOLDEN, CNN CORRESPONDENT: Most shoppers don't cause a media frenzy. This was German Chancellor Angler Merkler pushing a trolley through the shop of the future at CNET's. German retailer Metro wanted to show people how technology can change shopping. And Metro has the clout to transform the industry, the world over.

GERD WOLFRAM, M.D. METRO: We are number one in Germany, number two in Europe and number three in the world.

BOLDEN: Metro's management says all it takes is this microchip on every package. Using radio technology every single item could be marked and tracked. Allowing shoppers to instantly calculate their food bill.

WOLFRAM: Then you go through this gate. And then you see on the screen all the products.

BOLDEN: Then there's the ability to instantly review your choice of clothes on a real model in the privacy of the changing room.

WOLFRAM: This is then the other one. This is for the ladies.

BOLDEN: That was quick. You picked it up and it was within a second she was on the screen.

There is no question the technology works. Metro already uses it for logistics.

WOLFRAM: And even we give this information back to our manufacturer, to Procter & Gamble. So they know where it goes.

BOLDEN: But it may take five years for these so called RFID tags to move from the warehouse to the shop floor. Cost is one big reason.

WOLFRAM: It's too expensive to date. It's around 15 euros, and if you imagine having that on a yogurt, which is 29 euros, it doesn't make sense. We expect the price of the tag of the chip is going down to 1 cent, one-euro cent.

BOLDEN: It would have to. It wouldn't be practical.

WOLFRAM: It must, right.

BOLDEN: Another stumbling block, privacy. Metro is backed by some of the biggest names in manufacturing. And in I.T. that has some customers worried.

WOLFRAM: I would be concerned because I'm not sure if the product is deactivated, if it is deactivated and I can't trust the Metro group on this.

BOLDEN: Others love the convenience, especially in the changing room.

UNIDENTIFIED MALE: That would be very nice for men, actually, for people like me because I hate changing clothes.

BOLDEN: The main software company behind RFID says it's listening carefully to all views.

HENNING KAGERMANN, CEO. SAP: We cannot sit in an ivory tower and tell the world, that is the way it works. And we reached out very early. We had an advisory council with more than 10 companies worldwide. Companies to think about what it could mean.

BOLDEN: S.A.P. says one thing already agreed on, the tags can easily be deactivated by the customer.

But if you did decide to leave the tag on when you got home, then when it came time to washing if you put this white towel into the washing machine and then put in this red shirt, the washing machine could alert you that is not a good idea. Consumers will be the ultimate judge. Are these little warnings from RFID enabled stores and appliances worth the loss of privacy?

Jim Bolden, CNN, Hanover, Germany.

(END VIDEOTAPE)

WASTLER: Coming up next on IN THE MONEY, love, money and other things you and your spouse argue about. We've got the results of a new survey from "Money" Magazine.

And it's time to hear from you as we read some of your e-mails from the past week. You can send us an e-mail right now we are at INTHEMONEY@CNN.com.

(COMMERCIAL BREAK)

CAFFERTY: There are lots and lots of things a husband and wife can argue about. I know about these things. Most of it seems like it has something to do with money. A new survey confirms in the upcoming issue of "Money" Magazine. Allen Wastler has more on this in this week's "Inside Out." It's true; finances are a source of irritation in the matrimonial situation.

WESTHOVEN: Oh yes big source of irritation. But not the only source and not the supreme in many cases. Let's check out the results from the "Money" survey. What do you fight about more, money or sex. Of course, money was the big winner there.

CAFFERTY: Why do you suppose that is?

WESTHOVEN: They use the sex after they fight about the money.

WASTLER: But this is the part I can't figure out. Household chores, 51 percent said they fight about that versus 24 percent versus money, people fight more about taking out the garbage than should we put the money in the stocks or bonds. That seems to me a little bit weird. Then fighting more about kids than money. Of course, I kind of wonder about the phraseology of the question on that because when you are talking kids, a lot of times you are talking money. CAFFERTY: It has to do with money, absolutely.

WASTLER: You go back and forth. The part I really started taking on Jack was who is in charge of certain money matters. Let's show the results of that. Who claims to be responsible? Now this you see the shaded part there. Yes, you know investment decisions. Now I know I do that. I do the retirement planning. Buying insurance, my wife was a big contributor in that. But paying bills and budgeting, that's all me, baby, because day-to-day spending down there, my dearest, lovely wife, that's what I'm battling in the previous two items. I don't know how it is for you guys. But this didn't mesh to me. Made me think people were fibbing on the survey.

CAFFERTY: I have a dear friend of mine who worked as an anchorman here at one of the New York television stations a number of years ago and he asked for the secret to the fact I've been married to my wife Carol it has been like 32 years. My answer was diminished expectations. What I meant by that was that you come to realize at a certain point that if she's happy, then you probably are both happy and if she's not happy, then your life isn't worth living on that day.

So what you do is you learn to say, whatever floats your boat, dear. Be happy to accommodate you. If both sides do a little of that you find a way to work it out. This is not a discussion you probably are even interested in having. You've never been married.

WESTHOVEN: I have to do all those tasks myself.

CAFFERTY: Yes.

WESTHOVEN: But you had a really insightful thing in this money survey that I thought was interesting. We all know that men take more risks with money. That shows up in these surveys. There's a reason women don't. It's because they make less money in general and if there's a divorce they'll be left in, generally, worse shape.

CAFFERTY: The other reason is they tend to be probably smarter than we are.

WASTLER: I would tend to agree with that.

CAFFERTY: I think that's absolutely true. We need to get a woman president to run this country. The men haven't done that great of a job of it.

WASTLER: Well they are lining that up for you, Jack.

We were talking about marital problems and work. We have a Japanese take on that for you.

CAFFERTY: That's very funny.

WASTLER: There you go.

CAFFERTY: Can you watch all of that? I guess probably can't put it all on TV, can we? WASTLER: Probably not.

CAFFERTY: Thank you, Allen.

Time now to read your answers to our question about who is to blame for the illegal immigration problem in this country. Is it the government, is it Corporate America or is the consumer.

One viewer Jeff wrote this. "The answer to your question of the week is, D, all of the above. Placing blame on just one element of the snowballing immigration problem just allows the other two to deny their responsibility."

John from Wesley Chapel, Florida simply put it this way. "The federal government has the constitutional responsibility to police the country's borders."

And Jerry in Minnesota wrote, "I blame the Department of Homeland Security. It should not be left up to the border state --

WHITFIELD: Hello I'm Fredricka Whitfield in Atlanta. We want to show you pictures just now coming in. You are looking at the scene in Paris, France, where about 500,000 students and even union workers are apparently clashing with police. Hours ago we have been reporting that the protests were taking place at the time it seemed to be a peaceful protest of thousands of people who were protesting recent new labor laws that were put into place.

Well, now you are seeing quite a bit of unrest. You are seeing some smoke canisters being thrown and you are also seeing a number of the police officers there in their riot gear trying to hold back things being thrown from the members of the crowd there. Apparently a number of protests taking place throughout France the one you are looking at right now is unfolding in Paris but apparently a number of other cities throughout the country are experiencing demonstrations but we don't know if they have been unfolding just like this one in Paris.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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