Eliminate $1 bills to save the country billions?

This article suggests that the United States could save $5.5 billion during the next 30 years if we switched from $1 bills to $1 coins. The US Government Accountability Office estimates that this change in phasing out the $1 bill would require a four year transition period, but after that, the government would save approximately $522 million each year from this change. This doesn't seem like a lot of money considering our trillion dollar deficits, but it would definitely help at least a little bit to balance the budget. Personally, I used the 1 and 2 Euro coins all the time when I was studying in Spain, and they didn't really bother me at all. What are your thoughts on this proposal? Would you be willing to switch from the $1 bill to the $1 coin to help improve the country's budget?

One step closer to a government shutdown...

Yesterday, the Senate voted down both Republican and Democratic bills that would fund the government for the next six months (see here). This vote brings our country one step closer to a government shutdown, as the government's authority to spend money expires on March 18. According to the article, some Senators question why both parties put forth bills that were unlikely to pass; West Virginia Democrat Joe Manchin said, "Why are we engaging in this political theater? Why are we voting on partisan proposals that we know will fail? That we know don’t balance our nation’s priorities with the need to get our fiscal house in order?" He raises some good questions; what do you think are some answers for this? An interesting article titled, "Would anyone 'win' in federal government shutdown?" addresses some of these issues. In the article, Republicans were quoted as saying things such as "we are seeking spending reductions, not a government shutdown" and that Senate Democrats facing re-election would be the ones to have to explain why they can't trim federal spending, and that they also "stand to lose politically - significantly." Could the House Republicans, knowing that most Americans favor federal spending cuts, be creating bills with an unrealistic amount of spending cuts just to make the Democrats (who vote down said bills) look bad so that the Republicans will have an upper hand in the next election?

Federal debt and deficits

U.S. Federal Reserve Chairman Ben Bernanke believes that Congress should start focusing on ways to lower the debt to GDP ratio in the U.S. in an effort to tackle deficit problems and increase confidence in the government and its fiscal policies (see here). According to the article, the White House's latest proposed budget will stabilize the debt to GDP ratio over the next several years. However, according to Hennessey's Chart of percent of the deficit to GDP (see here), Obama's proposed budget path actually suggests long term budget problems. This article also touches on several points about federal debt and deficits that we have discussed in class. Both articles explain how the U.S. needs to get on a sustainable path or else we'll have to face harsh interest rates from foreign creditors. Some economists argue that federal budget deficits are meaningless because the government issues US dollars, and some believe that deficits are even beneficial. Do you agree with this? If not, why do you think deficits may be detrimental to our country? What are some ways that the US could decrease the deficit and make it more sustainable?

The battle continues...

http://www.voanews.com/english/news/usa/Partisan-Divide-Continues-on-US-Federal-Budget-117489133.html

Last week, Congress avoided a government shutdown by implementing a stop-gap spending measure that will fund federal agencies for two weeks. But, as Congress is quickly approaching another potential funding expiration, there seems to be little sign of compromise between the two political parties. The proposed funding levels between the Republicans and the Democrats differ by tens of billions of dollars, and neither party seems to be willing to budge anytime soon. What do you think it will take for the two parties to reach a compromise?

Banks, Merchants, & ATM fees

http://www.nytimes.com/2011/03/08/business/08debit.html?_r=1&ref=business

The second of today's double-feature, and it's an all out war.
The Federal Reserve recently passed an amendment that lowers the "swipe fee" that banks get from retailers every time a debit transaction occurs. The proposed cut will make the transaction 12 cents per transaction from an average of 44 cents. Many banks claim they will be "unable to afford to issue debit cards to customers or will force them to raise other consumer banking charges to cover the costs.
They also claim retailers will reap unfair profits." Retailers paid about $20.5 billion last year in transaction fees. "Banks and credit card companies contend that the fee cap will create a windfall for giant retailers like Home Depot and Wal-Mart, which they say generate the bulk of debit card transactions, while doing little for small retailers."

Lots of finger-pointing and howling going on about this one, who does this help and who does this hurt in your opinion? Other comments?

UK green training

http://www.bbc.co.uk/news/uk-politics-12671361

This article shows Britain's commitment to a greener country. Apprentices for the installation programs are generally in the 16-18 year old age range. Not only is this helping their environment and lowering heating costs, it's also is creating jobs. By selecting younger people to be the technicians, they're giving them tools for the future. My concern however, is that these aren't going to be the types of skills that will sustain them for their futures. The project is aiming to sustain 100,00 jobs over the next 5 years, but that should be about the time these kids should be in college. Is it better to teach these skills to the older, unemployed generation? Other thoughts?

High-Speed Rail in America?

http://www.time.com/time/politics/article/0,8599,2047110,00.html

President Obama's proposed 2012 budget includes bringing access to high-speed rail to 80 percent of Americans within 25 years. US passenger trains are currently considered a "global laughingstock" considering most of America's trains travel at speeds that were common a century ago. A high-speed rail system would "help create jobs, reduce dependence on foreign oil and relieve congestion in highways and airports, while upgrading the long-term efficiency and productivity of the U.S. economy." However, high-speed rail, one of Obama's signature initiatives, has surely gotten its fair share of criticism as you can see in the article. In fact, just recently, Florida's Gov. Rick Scott rejected any plans for federal high-speed rail systems within his state because he was fearful that overruns could cost Florida over $3 billion (http://www.huffingtonpost.com/2011/03/04/rick-scott-florida-high-speed-rail_n_831305.html). This brings us to an important point: funding. In theory, the idea of a high-speed rail system throughout America sounds great; but, how will our country pay for such an expensive investment during a time where we are supposed to be making huge spending cuts? Do you think a high-speed rail system is worth the hefty price? Will the benefits of massive job creation and long-term efficiency outweigh the further increase in the deficit? What are your thoughts on the issue?