January 15, 2013

The Platinum Coin: The Legal Wrinkle That Killed It

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So what was it that made the Obama administration strike the death knell of the platinum coin idea?

Many of us assumed it was killed as part of the political strategy of the White House. Perhaps the idea of minting a high-value platinum coin registered with internal polls as repulsive to the public. Or perhaps the administration shot down the idea in order to make it clear to Republicans that refusing to raise the debt ceiling would lead to a government shutdown.

Zeke Miller at Buzzfeed says that neither of these ideas is right. Instead, the idea was quietly put to rest by the Federal Reserve. Miller reports that a "senior administration official" claims that the "independent central bank would not have credited the Treasury's accounts for the vast sum for depositing the coin."

This is interesting. As Greg Ip pointed out, the platinum coin idea always was a challenge to the independence of the Fed. If it were undertaken, the Fed would basically be ordered by the Treasury to engage in monetary expansion. The Fed might even have to alter its open markets operations in order to sterilize the monetary impact.

More...

http://www.cnbc.com/id/100378214

January 15, 2013

Why Many Young Americans May Die with Debt

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Younger Americans can expect to die with credit-card debt if their current spending patterns continue, a new study finds.

Co-authored by Ohio State University economics professor Lucia Dunn, the research suggests that younger generations may continue to add credit-card debt well into their 70s, and die still owing money on their cards.

"If what we found continues to hold true, we may have more elderly people with substantial financial problems in the future," Dunn said. "Our projections are that the typical credit-card holder among younger Americans who keeps a balance will die still in debt to credit-card companies."

http://www.livescience.com/26236-why-many-young-americans-may-die-with-debt.html

January 15, 2013

Worst Countries For Firearms Related Deaths

Few major nations have the right to bear arms configured in their Constitution. Even fewer (as in we are the only one) have gun control legislation as a hot button political issue. The U.S. is the most violent core economy in terms of gun related deaths. It is also the leader in gun violence at school campuses. Yet, the U.S. does not lead the world in firearms related deaths. Countries were gangs and drugs are a problem top the list, even where there is strict gun control.

For example, back in 2003, Brazil passed laws making it illegal to own unregistered guns, to carry guns outside one’s home or business, to sell guns without a background check, or to buy a gun before the age of 25. Penalties were also increased. A year later, a large voluntary national disarmament program began and continues to this day, yielding hundreds of thousands of guns each year. In 2004, firearm homicide, which had been increasing steadily for a decade, fell 9 percent. But that has since changed in Brazil. Cities like São Paulo have seen recent outbursts in violence. Unlike the U.S., gun violence is mostly gang related and the innocent victims are usually those caught in the crossfire on the city streets outside their homes rather than in the class room.

According to the Organization of American States and the United Nations Office on Drugs and Crime, these are the most violent nations on the planet outside of a war zone.

http://www.forbes.com/sites/kenrapoza/2012/12/17/worst-countries-for-firearms-related-deaths/

January 14, 2013

More Solar Innovation: Stanford's Peel and Stick Flexible Application

Renowned innovator and futurist Ray Kurzweil predicts that within 20 years we will have our energy problem licked. It’s solved. We just don’t know it yet. As he told Lauren Fenny of PBS: “One of my primary theses is that information technologies grow exponentially in capability and power and bandwidth and so on. If you buy an iPhone today, it’s twice as good as two years ago for half that cost. That is happening with solar energy — it is doubling every two years…Every two years we have twice as much solar energy in the world.

Today, solar is still more expensive than fossil fuels, and in most situations it still needs subsidies or special circumstances, but the costs are coming down rapidly — we are only a few years away from parity. And then it’s going to keep coming down, and people will be gravitating towards solar, even if they don’t care at all about the environment, because of the economics.

So right now it’s at half a percent of the world’s energy. People tend to dismiss technologies when they are half a percent of the solution. But doubling every two years means it’s only eight more doublings before it meets a hundred percent of the world’s energy needs. So that’s 16 years. We will increase our use of electricity during that period, so add another couple of doublings: In 20 years we’ll be meeting all of our energy needs with solar, based on this trend which has already been under way for 20 years.”

Of course, there are huge integration and storage issues that will need to be addressed. But his point about solar echoes what has occurred with “green” technologies such as the Prius. Consumer Reports recently found the Prius to have the lowest cost of ownership of any car. People buy it “because of the economics.” Similar things are happening with electric vehicles. Motor Trend just named the Tesla Model S it’s car of the year, and competitive in price with other luxury car peers. “At its core, the Tesla Model S is simply a damned good car you happen to plug in to refuel.” For Motor Trend, the environmental benefits are beside the point.

http://www.forbes.com/sites/peterdetwiler/2013/01/10/more-solar-innovation-stanfords-peel-and-stick-flexible-application/

January 13, 2013

Treasury: We won’t mint a platinum coin to sidestep the debt ceiling

The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.

That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.

The inclusion of the Federal Reserve is significant. For the platinum coin idea to work, the Federal Reserve would have to treat it as a legal way for the Treasury Department to create currency. If they don’t believe it’s legal and would not credit the Treasury Department’s deposit, the platinum coin would be worthless.

The idea of minting a platinum coin to invalidate the debt ceiling comes from a few key sentences tacked onto the 1997 Omnibus Consolidated Appropriations Act. “Notwithstanding any other provision of law,” it reads, “the Secretary of the Treasury may mint and issue platinum coins in such quantity and of such variety as the Secretary determines to be appropriate.”

http://m.washingtonpost.com/blogs/wonkblog/wp/2013/01/12/treasury-we-wont-mint-a-platinum-coin-to-sidestep-the-debt-ceiling/

January 12, 2013

Section 8 Housing voucher distribution canceled after thousands waiting in line get out of control

TAYLOR, Mich. (WXYZ) - A chaotic scene erupted at the Taylor Human Services Center when the crowd waiting for a Section 8 Housing voucher distribution got out of control

Police say thousands of people from all over the area were at the center. Many were homeless, single moms, or disabled. They were hoping to get help paying for their housing from the government.

"There was elderly, disabled people, pregnant single women. They were here for help, to get their section 8 vouchers. It just shows you what a desperate need... some were here since yesterday," said Rhianna Rodriguez.

7 Action News is being told there were 1,000 vouchers available and 5,000 people showed up trying to get one.


Read more: http://www.wxyz.com/dpp/news/region/wayne_county/section-8-housing-voucher-distribution-canceled-after-thousands-waiting-in-line-get-out-of-control#ixzz2Hn4uuSfL

January 10, 2013

Research suggests we may actually face a declining world population in the coming years

A somewhat more arcane milestone, meanwhile, generated no media coverage at all: It took humankind 13 years to add its 7 billionth. That’s longer than the 12 years it took to add the 6 billionth—the first time in human history that interval had grown. (The 2 billionth, 3 billionth, 4 billionth, and 5 billionth took 123, 33, 14, and 13 years, respectively.) In other words, the rate of global population growth has slowed. And it’s expected to keep slowing. Indeed, according to experts’ best estimates, the total population of Earth will stop growing within the lifespan of people alive today.

And then it will fall.

This is a counterintuitive notion in the United States, where we’ve heard often and loudly that world population growth is a perilous and perhaps unavoidable threat to our future as a species. But population decline is a very familiar concept in the rest of the developed world, where fertility has long since fallen far below the 2.1 live births per woman required to maintain population equilibrium. In Germany, the birthrate has sunk to just 1.36, worse even than its low-fertility neighbors Spain (1.48) and Italy (1.4). The way things are going, Western Europe as a whole will most likely shrink from 460 million to just 350 million by the end of the century. That’s not so bad compared with Russia and China, each of whose populations could fall by half. As you may not be surprised to learn, the Germans have coined a polysyllabic word for this quandary: Schrumpf-Gessellschaft, or “shrinking society.”

American media have largely ignored the issue of population decline for the simple reason that it hasn’t happened here yet. Unlike Europe, the United States has long been the beneficiary of robust immigration. This has helped us not only by directly bolstering the number of people calling the United States home but also by propping up the birthrate, since immigrant women tend to produce far more children than the native-born do.

http://www.slate.com/articles/technology/future_tense/2013/01/world_population_may_actually_start_declining_not_exploding.html

January 10, 2013

Europe's Scariest Heatmap

http://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmap

January 10, 2013

As new fiscal crises near, Democrats seek more tax increases

But much of what Obama is talking about is raising tax revenue without actually raising tax rates. In Washington-speak, lawmakers will try to collect more tax money by closing tax loopholes, perhaps limiting popular tax deductions and to some degree changing the way citizens pay into the popular Medicare and Social Security programs.

Raising tax revenues without raising tax rates could take several forms.

One proposal popular with economists is treating some portion of employer-provided health insurance as taxable income on a filer’s tax return, an idea proposed by Hillary Clinton and accepted by many Democrats during the 2008 campaign. If a health plan is valued at more than $14,000, for example, the sum above that could be treated as taxable income.

Another idea would be to limit how much mortgage interest, state taxes or charitable giving can be deducted from taxes by high-income earners. The New Year’s deal started phasing out some of the tax exemptions claimed by high-income earners and limiting their tax deductions. This could gain in popularity because tax rates remain unchanged and middle-income Americans would not be affected.

A bipartisan presidential commission in 2010 favored scaling back mortgage-interest deductions, in part because they effectively subsidize the wealthy by offering them a bigger discount off a higher tax rate. The problem is that rolling this program back is fraught with risk in today’s impaired housing market.

“How do you phase it in? The more you cut back, the more effect it has on the housing market,” noted Roberton Williams, a senior fellow at the Tax Policy Center, jointly run by the center-left Brookings Institution and the centrist Urban Institute. “How do you deal with that transition period?”

Read more here: http://www.mcclatchydc.com/2013/01/09/179447/as-new-fiscal-crises-near-democrats.html#storylink=cpy

January 9, 2013

US consumer borrowing up to record $2.77T November on more car, school loans

WASHINGTON — U.S. consumers took on more debt in November to buy cars and attend school, but stayed cautious with their credit cards.

The Federal Reserve said Tuesday that consumers increased their borrowing in November by $16 billion from October to a seasonally adjusted record of $2.77 trillion.

Borrowing that covers autos and student loans increased $15.2 billion. A category that measures credit card debt rose just $817 million.

http://m.washingtonpost.com/politics/us-consumer-borrowing-up-to-record-277t-november-on-more-car-school-loans/2013/01/08/f69f7c08-59cf-11e2-b8b2-0d18a64c8dfa_story.html