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Pay for Success: How a New Kind of Bond Could Save Taxpayer Money and Improve Social Services

The White House has big plans for a new idea to funnel private money into social work.


Two federal agencies will steer tax money for social programs through a new for-profit investing tool tested in the United Kingdom and Australia, according to a report co-authored by the White House and the Nonprofit Finance Fund.

Rather than providing social services directly, the bonds will allow the government to task a firm in the private sector to solve a public challenge, paying the company only if it achieves certain success metrics. Using pay-for-success bonds could save taxpayer money, earn a profit for impact investors, and incentivize innovation to solve chronic social challenges. In the United States, this is all theoretical at this point, but 2012 may be the year that changes.

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To Save Post Offices, Turn Them Into Public Banks

The United States Postal Service is having trouble staying in business. Why not turn post offices into a public option for banking?


I didn’t get any mail today, or the day before. I’m not the only one lacking in pen pals: From 2006 to 2010, mail volume declined by 20 percent, and it’s going to keep dropping. We’re doing a lot more of our correspondence online these days, and that decline in business is putting the U.S. Postal Service—a government enterprise that would rank 29th on the Fortune 500 if it were a business—in an increasingly precarious spot, forcing us to figure out how to keep mail service solvent.

To start eliminating the USPS’s billion dollar deficits, most plans focus on cuts: ending Saturday delivery, cutting more jobs, and renegotiating employee contracts to cut wages and benefits. Some of that is probably necessary, or will be, as physical mail continues its decline, but this isn’t the economic time to cut tens of thousands of jobs. Instead, why not look at this from a business perspective and find a new way to make money? Let's keep the Postal Service alive by having it offer a public option for banking.

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Glad Bank of America Dropped its Fee? Thank the Governmarket

When government makes the rules fair, everyone wins.


Yesterday, Bank of America announced it was dropping the $5 monthly fee on its debit card service for checking accounts. The fee had earned the ire of the bank’s customers and became a symbol of corporate excess.

Bank officials blamed the card fee on the government, saying that new rules limiting fees they charge stores to process card payments forced them to shift costs to consumers. We noted that a lot of other banks operating under the same rules don’t charge those kind of fees, and suggested you take advantage of your options: If you don’t like how Bank of America is treating you, take your money elsewhere. More and more people are doing just that.

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The Debt Debacle: A Phony Solution to a Phony Crisis

How the debate over the debt crisis prevented Washington from actually solving it

If the news from Washington has been making you anxious, rest easy: The economy won’t collapse—at least not today—because policymakers have come to an agreement. And the crisis was fake, anyway.

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