New Ideas In The News
By Steve GillmanAs you know, I like to put my own new ideas out there. But I also like to sometimes write about creative ideas that are in the news. Sometimes these are things that are already being tried, and other times they are the subject of ongoing debates. Here are some that caught my attention this week.
Voluntary Gas Tax
“Who would volunteer to pay more in gas taxes?” That was what I and a lot of other readers probably thought when seeing this opinion piece in Forbes magazine by a couple professors from Yale (Ian Ayres and Barry Nalebuff). But they made and interesting case for a new idea that just might work.
Essentially the plan would pay people $500 cash up front (actually a credit on their taxes), to agree to pay an extra dollar per gallon on their gasoline for the year. I imagine there are quite a few people who would go for this. Here are some of the benefits:
1. It stimulates the economy now while relatively quickly getting back all the money used, in the form higher taxes at the end of the year.
2. It turns people’s usually harmful tendency to look for short-term over long-term gain to an advantage (see the following for an explanation of this)
3. It reduces the amount of gas used, and so our dependency on foreign oil. This is because once the bonus is paid, the recipient has every incentive necessary (an extra dollar per gallon) to use less gasoline.
4. Less gas used would also benefit the environment, and so all of us.
The proponents of the idea suggest that it be sold as a “conservation bond,” with patriotic undertones to generate more interest. The part I don’t like is that odometer reading would be required to charge for the gas used. This would be intrusive and require another bureaucracy.
New Lending Ideas
In the wake of the banking troubles in this country, new lending ideas have been needed. Now, many major corporations are starting to fill the void left by the banks. Large corporations like Caterpillar, Cisco, Toyota and others are bypassing banks and issuing bonds to raise tens of billions of dollars, some of which they are then loaning out to their suppliers and customers, who are having trouble getting the financing they need for normal operations.
IBM, for example, has loans out to 1-800-FLOWERS and some internet search companies among others. Having recently raised money in the bond market at low interest rates, they loan it out at between 5% and 9% interest. This kind of activity is keeping many businesses going that might otherwise be in serious trouble. Capitalism might be looking less-than-ideal at the moment, but it is creative as always.
I’ll be reporting on more new ideas and creative solutions in future posts.
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Tags: creative solutions, gas tax, lending, new ideas