Wednesday, July 13, 2011

Penny Wise But Pound Foolish?

USA Today reports that the United States Treasury Department will stop U.S. Savings Bonds at banks and credit unions at the end of the year.  Savings bonds will still be sold on line as they have been since 2002.  The department claims they will save $70 million by making the change.

I'll be the first to admit that $70 million is a big jar of pennies, but the Treasury Department has been selling bonds on line for nearly 10 years.  Last year, they sold $1.2 billion of Savings Bonds but only 11% were sold online.

I'm not a luddite; I haven't written a physical check since 2003 or so.  I pay bills on-line; my employer deposits my check electronically; I view Amazon as a godsend, in part because I've never lived in a community with a thriving privately owned bookstore.  I'm certain beyond a reasonable doubt my debit card doesn't contain the mark of the beast.

That being said, it seems that people have been slow to adopt the idea of purchasing Savings Bonds online.  The article gave no statistics, but I suspect that grandparents and great-grandparents purchase the lions share of those bonds for grandchildren or great-grandchildren.  USA Today reports "44% of Americans age 65-73 have broadband at home, a 2010 survey by the Pew Research Center says. For Americans 74 and older, the percentage is 20%."  It seems as if the Treasury Department is cutting its customer base by by 50%-70%.

Part of the United States's financial problems stems from a dearth of private sector saving.  Savings Bonds used to be one of the ways that parents attempted to instill the habit in children.  Taking crumpled bills to the bank and handing them to the teller was part of the experience.  I wonder is sitting in front of the computer screen and having a parent type in a debit card number will have the same effect.


caheidelberger said...

Moving bond sales and other commerce exclusively online seems to support the UN and Finnish position that access to broadband is a human right. (Hey, are we getting and LD topic on that any time soon?)

LK said...

I'm not sure that thinking motivated the change. I'm guessing a few more government jobs will be cut.

The current LD resolutions that coaches will vote on.

1. Resolved: The United States ought to extend to non-citizens accused of terrorism the same constitutional due process protections it grants to citizens.

2. Resolved: It is morally permissible for victims to use deadly force as a deliberate response to repeated domestic violence.

3. Resolved: In the United States, possession of handguns ought not be an individual right.

4. Resolved: The use of eminent domain for private economic development is just.

5. Resolved: Estate taxes are just.

6. Resolved: A government has the obligation to lessen the economic gap between its rich and poor citizens.

7. Resolved: A just society ought to prioritize environmental concerns over the production of energy.

8. Resolved: In the United States, law enforcement ought to be required to have probable cause to search data an individual has stored on remote servers.

9. Resolved: Targeted killing is a morally permissible foreign policy tool.

10. Resolved: Individuals have a moral obligation to assist people in need.

caheidelberger said...

I agree, the Treasury probably wasn't reading texts on Internet philosophy or news reports from Finland. But I can see the rights talk coming: here's another article talking about how doing business online is becoming inescapable. And when so much of daily commerce can only be done online, it will behoove us all the more to guarantee everyone can get online.

From the above, I'd like to hear #5, 6, and 8 (even though 8 may turn out to be too narrow). We've done #4 and 7, so I can do without the repeat... though today's kids wouldn't notice!