TIME Innovation

Five Best Ideas of the Day: September 26

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Al-Shabaab is stronger a year after their horrific attack on a mall in Kenya, thriving on widespread resentment of Kenyan anti-Muslim policies which must be reformed.

By the International Crisis Group

2. The unnecessary separation of oral care from the rest of medical care under Medicaid puts the poor at risk of worse health and even death.

By Olga Khazan in the Atlantic

3. In these views from activists and intellectuals in Syria, we see rueful themes of a hijacked revolution and an intervention that may be coming too late.

By Danny Postel in Dissent

4. Adding a way to assess learning for students is the key to making education games work for schools.

By Lee Banville in Games and Learning

5. The toothless early warning system designed to head off future financial crises must be strengthened or it risks missing the next market cataclysm.

By the Editors of Bloomberg View

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Economy

Happy Birthday, U.S. Treasury

Exterior of the US Treasury building.  (
The U.S. Treasury building in 1937 Carl Mydans — The LIFE Picture Collection/Getty Images

You still look like a million bucks

It was 225 years ago today that the still-nascent United States finally decided to get its financial house in order. The Department of the Treasury was established on Sept. 2, 1789, during an early session of the 1st United States Congress. The Department’s duties, according to the founding law, are:

“…to digest and prepare plans for the improvement and management of the revenue…to prepare and report estimates of the public revenue, and the public expenditures; to superintend the collection of revenue; to decide on the forms of keeping and stating accounts and making returns, and to grant under the limitations herein established, or to be hereafter provided, all warrants for monies to be issued from the Treasury, in pursuance of appropriations by law.”

Or, in layman’s terms, the Treasury Department issues savings bonds, prints cash, mints coins, collects taxes through the IRS and enforces laws related to alcohol and tobacco. People often conflate the duties of the Treasury with those of the Federal Reserve, but the two are actually separate organizations. The Treasury is a department of the executive branch and is generally concerned with properly maintaining the day-to-day activities of the government. The Federal Reserve is an independent body that sets long-term fiscal policy in an effort to control borrowing and inflation rates.

Our first Secretary of the Treasury was Alexander Hamilton, a key figure in the development of early American fiscal policy who advocated heavily for a central banking system and the federal assumption of state debts following the Revolutionary War (and no, he didn’t put himself on the $10 bill — he wasn’t added to the currency until the 1920s). The current secretary is Jack Lew, appointed by President Obama in 2013.

In addition to the Treasury’s birthday, we also just passed another significant fiscal anniversary. In August 1971, the U.S. stopped converting dollars held by foreign governments to gold at a value of $35 per ounce. The policy, called the Bretton Woods system, had been put in place following World War II to convince rebuilding countries like Germany and Japan to invest in American dollars. But by the 1960s, the system was placing strain on the U.S. economy as the number of dollars held by foreign countries outpaced the amount of gold the U.S. had on hand. Following a secret meeting at Camp David with this top advisers, President Richard Nixon announced on August 15 a suspension of the policy, transforming the dollar into a floating currency not pegged to any particular exchange rate. Nixon also announced a 90-day freeze on prices and wages in the U.S. and an additional 10% tariff on imports.

Nixon's Economic Gamble
The Aug. 30, 1971, cover of TIME

Collectively known as the “Nixon Shock,” the measures surprised people both at home and abroad. Reporting in the days following the announcement, TIME wrote of foreign leaders abandoning their summer vacations to react to the announcement amid worries that the dollar, no longer tied to a fixed rate, would plummet in value. In the years that followed, countries in Europe and Asia also allowed their currencies to float, making exchange rates more volatile than they had been in the past.

Read TIME’s original 1971 report on Nixon’s controversial decision to abandon gold: The Dollar: A Power Play Unfolds

TIME Treasury

Treasury Secretary Jack Lew Warns Time Is Running Out To Lift Debt Ceiling

Says U.S. will be unable to pay its bills past end of February if Congress doesn't raise debt ceiling

The Treasury Department will run out of “extraordinary measures” to keep the government afloat by the end of February if Congress does not act to raise the debt limit, Treasury Secretary Jack Lew said in a statement Monday.

The temporary suspension of the debt limit passed by Congress last year expires Feb. 7, but Lew warned that the Treasury would only be able to stave off a government default using “extraordinary measures”—accounting maneuvers such as deferring trust fund investments—for a “brief span of time.”

“We now forecast that we are likely to exhaust these measures by the end of the month,” Lew said.

The statement calls on Congress to act quickly to increase the debt limit so that the government can borrow the money it needs to keep functioning, and warns that delayed action could have serious financial consequences. Last year’s debt stand-off caused a plummet in consumer confidence and rattled financial markets. Lew also warned that only Congress can increase the government’s borrowing authority, and “no Congress in the history of the United States has failed to meet this responsibility.”

Anticipating a Republican argument that raising the debt limit should be tied to spending cuts, Lew reminds Congress that the debt limit is about “paying bills that have already been incurred,” and that refusing to raise the ceiling won’t make the bills go away. The statement also reminds Congressional Republicans that House Speaker John Boehner said that not only should the U.S. never default on debt, we “shouldn’t even get close to it.”

TIME U.K.

Queen Elizabeth’s Courtiers Urged To Tighten Royal Belt

A baker poses with a marzipan mosaic of Britain's Queen Elizabeth in the City of London
A baker poses with a marzipan mosaic of Queen Elizabeth II at Konditor and Cook in London on May 3, 2012. Olivia Harris / Reuters

Staff told to ease spending as Queen Elizabeth's reserve fund sinks to 'historic low' of $1.6 million

Correction appended 1.10pm Jan.28

Advisers to Queen Elizabeth II have widely overspent and failed at controlling her finances, according to a parliamentary committee report issued this week. The queen’s reserve fund sank from more than $58 million in 2001 to a “historic low” of $1.6 million at the end of last year.

The Queen’s household overspent her annual budget of $51 million by about $3.8 million last year. The imprudent courtiers were advised to take money-saving tips from the Treasury, the government’s finance ministry.

The House of Commons Public Accounts Committee noted that the royal palaces were “crumbling,” the Daily Telegraph reports, and said the Treasury needed to “get a grip” to help the royal household protect them from “further damage and deterioration.”

Windsor Castle and Buckingham Palace are reported to be below “acceptable condition,” said Margaret Hodge, the committee’s chairman, and more cash is needed to address serious maintenance issues with at least 39 royal buildings overall.

“We believe that the Treasury has a duty to be actively involved in reviewing the household’s financial planning and management—and it has failed to do so,” she added.

[Daily Telegraph]

Correction: The original version of this story misstated the amount left in the Queen’s reserve fund.

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