September Is the Best Fund-Raising Month for Obama in 2012

By MICHAEL D. SHEAR

President Obama's campaign raised more money in September than any candidate has raised in a previous month this year, according to several Democrats familiar with the campaign's money-raising operation.

Several sources said the president's haul last month exceeded the $114 million he raised in August, in part on the strength of donations that flowed in after the Democratic National Convention and former president Bill Clinton's well-received speech.

One Democrat familiar with the fund-raising effort said Mr. Obama and his allies at the Democratic National Committee raised more than $150 million in September.

Officials with the campaign declined to comment on the news, which was first reported by The Wall Street Journal. One Democratic source said aides were still tallying the funds raised in September ahead of the official report they must submit later this month.

Mr. Obama edged out Mitt Romney's $112 million in August. In 2008, Mr. Obama had the biggest month ever for any presidential candidate, raising $193 million that September.

This year's haul signals a boost in financial support for Mr. Obama as he nears the conclusion of his battle with Mr. Romney in a little over a month. It ensures that Mr. Obama will have plenty of money for the balance of the campaign despite having been outraised by his Republican rival throughout the summer.

And it comes as Mr. Obama's campaign confronts the president's lackluster performance at the first presidential debate Wednesday night.

Mr. Romney's campaign did not release any information about its fund-raising on Thursday.

Mr. Obama's advisers have long warned that Mr. Romney's fund-raising prowess and the success of Republican “super PACs” that are backing him threatened to put the president at a financial disadvantage going into the final stretch.

In fact, it appears to be Mr. Romney who has struggled to keep up. Mr. Obama's campaign has run far more ads than Mr. Romney in the last several weeks. And the president's ground operation - which was built over the course of several years - is far larger than Mr. Romney's.

The never-ending money chase is largely Mr. Obama's own doing. By choosing to reject federal campaign funds in 2008, Mr. Obama effectively condemned himself - and his future rival - to a continuing need to raise money all the way to election day. (Senator John McCain of Arizona chose to take the federal money in 2008 and was vastly outspent.)

Now, both Mr. Obama and Mr. Romney have continued to hold fund-raisers and make appeals to their supporters for cash even as they hold big rallies in battleground states across the country.

Mr. Obama's apparent success in September may be a result of a surge in small donors, who have long been a vital part of the president's financial base. The campaign said on Monday that it had collected money in more than 10 million individual donations, a record.

By contrast, Mr. Romney has tended to rely more on fewer - but wealthier - donors. That has meant that more of Mr. Romney's money is housed at the Republican National Committee, which, by law, can accept much larger contributions from individuals.

Follow Michael D. Shear on Twitter at @shearm.

Biden Gives Rebuttal to Romney\'s Debate Remarks

By TRIP GABRIEL

COUNCIL BLUFFS, Iowa - Criticizing Mitt Romney in the first presidential debate, his voice now indignant, now deeply sarcastic, Vice President Joseph R. Biden Jr. delivered the kind of impassioned response to the Republican nominee on Thursday that many Democrats said they wished they had heard from President Obama.

Mr. Biden addressed some 600 supporters here after speaking briefly to reporters, who asked for his impressions of Mr. Romney's performance.

“Last night we found out he doesn't have a $5 trillion tax cut,'' Mr. Biden said. “I guess he outsourced that to China or something.''

He defended Mr. Obama's low affect and refusal to engage Mr. Romney more aggressively. “I think the president did well; he was presidential,'' he said. “As time goes on, meaning days, it's going to become pretty clear that Governor Romney has either changed a number of his positions or didn't remember some of his positions. I think at the end of the day we have two more debates coming up, or the president does, and I feel very good about it.''

Anticipating his own debate with Representative Paul D. Ryan one week away on Oct. 11, Mr. Biden said he had been studying Mr. Ryan's positions to avoid making any factual errors describing them. “All debates are tough. But I'm looking forward to it, I really am,'' he said.

At his rally, Mr. Biden delivered scorching responses to positions Mr. Romney espoused on Wednesday night on Medicare, deficit reduction and education. He accused Mr. Romney, often sarcastically, of backing away from earlier positions. He said he was “stunned” to hear Mr. Romney say he planned no cuts to education.

“Yo!'' Mr. Biden said, pretending to address Mr. Romney. “That came as a real surprise to your Republican colleagues in the House, man.''

(The House-passed budget written by Mr. Ryan calls for deep cuts to soci al programs without specifying amounts. The White House has calculated that if the cuts are applied equally across all programs, they will chop about 20 percent from each one.)

At another point, Mr. Biden dropped his voice to a deep baritone meant to mock Mr. Romney, saying, “I don't have a plan to cut $5 trillion.''

He laid out the Democrats' version of how the various tax cuts Mr. Romney proposes â€" including a 20 percent reduction in income taxes, eliminating inheritance taxes and extending all the Bush-era tax cuts â€" add up to $5 trillion over a decade.

He contrasted the Republicans' economic plans with what he called the administration's “balanced” proposal to include spending cuts with higher taxes on the wealthy by allowing the Bush-era cuts on the top income bracket expire.

“We're gonna ask â€" yes â€" we're gonna ask the wealthy to pay more,'' he said. “My heart breaks.''

“You know the phrase they always use?'' he added, again lowering his voice, this time in imitation of a scary-sounding television attack ad. “Obama and Biden want to raise taxes by $1 trillion.''

“Guess what,'' he said. “Yes, we do, in one regard. We want to let that trillion-dollar tax cut expire so the middle class doesn't have to bear the burden of all that money going to the superwealthy. That's not a tax raise. That's called fairness where I come from.''

The Romney-Ryan campaign jumped on the remark, highlighting the “yes, we do” phrase to accuse the president of baldly embracing tax hikes. An image of a yes-we-do T-shirt was circulated by a campaign spokesman, and Mr. Ryan planned to highlight the remark at a joint rally with Mr. Romney in Virginia late Thursday.

But the administration's proposal to increase revenues by some $1 trillion is fairly old news. The White House and Congressional Democrats have made no secret that is the estimated figure to be raised by allowing the Bush-era ta x cuts for the highest earners to expire next year, which has been part of Mr. Obama's agenda for two years.

The Caucus Click: Biden Weighs In

By TRIP GABRIEL

Vice President Joseph R. Biden Jr. spoke to reporters about the first presidential debate before a campaign event in Ames, Iowa, on Thursday.

On the Debate Stage, Romney the Moderate

By JACKIE CALMES

To viewers of the first presidential debate who knew Mitt Romney only from the Republican primary season or Democratic advertising, the man on the stage on Wednesday night must have sounded surprisingly moderate.

Tax cuts under a President Romney? On the whole, really wouldn't be any. Government regulation? Good for business. President Obama's education policies? Lots to like there. Mr. Obama's health care plan? Would keep some of its key provisions.

Republicans are reveling in the instant analysis that Mr. Romney outscored Mr. Obama on Wednesday night, largely on style points for aggressiveness.

Yet many conservatives, who have long viewed Mr. Romney's ideological commitment with some skepticism, might have been less than thrilled with his tone. Mr. Romney, in front of a national television audience, took the opportunity to present himself as a reasonable pragmatist who was willing to work across the aisle as go vernor of Massachusetts - risking criticism that this was another “Etch-A-Sketch” moment for him, potentially reviving accusations that he is a flip-flopper.

Mr. Romney's responses repeatedly were a reminder of the difference between the tenor of Republican primary debates, where last winter he and his rivals vied to serve up red meat to the party's conservative base, and these general-election debates, where the two finalists compete for the few undecided voters in the electorate's center even as they try to keep their more ideological supporters energized.

The change in Mr. Romney was evident from his opening statement, in which he eschewed get-goverment-out-of-the-way rhetoric to argue for Washington's essential role in society. He told of an unemployed woman in Dayton, Ohio, who recently grabbed him and a woman in Denver, baby in her arms, who similarly pleaded to his wife, Ann, about her husband's joblessness, both women asking, Can you help?

“An d the answer is yes,” Mr. Romney said. “We can help.”

Questions from the moderator, Jim Lehrer, about whether there is too much government regulation seemed the softest of softballs to a conservative. Yet Mr. Romney's answer was not exactly out of the Tea Party playbook.

“Regulation is essential,” he said emphatically. “You can't have a free market work if you don't have regulation. As a businessperson, I had to have - I needed to know - the regulations. I needed them there. You couldn't have people opening banks in their garage and making loans. I mean you have to have regulations so that you can have an economy work. Every free economy has good regulation.”

Only then did Mr. Romney add, “At the same time, regulation can become excessive” - not “is” excessive, as conservatives might prefer.

Even when Mr. Lehrer, seemingly intrigued, followed up by asking, “Is it excessive now, do you think?” Mr. Romney vacillated: “In some places, yes; in other places, no.”

Mr. Romney's example was the Dodd-Frank law tightening regulation of financial institutions. On the campaign trail, he routinely promises conservative audiences that he will repeal it, period.

But on the Denver stage, he said, “I would repeal it and replace it,” adding, “We're not going to get rid of all regulation. You have to have regulations. And there's some parts of Dodd-Frank that make all the sense in the world.” Indeed, his main complaint was that it did not regulate big banks enough to guard against the need for government bailouts again. Mr. Romney, sounding like a populist, called the law “the biggest kiss” to New York banks that he had ever seen.

Mr. Romney's remarks even roused Mr. Obama to quip, “It appears we've got some agreement that a marketplace to work has to have some regulation.”

On the defensive early on about the size of his proposed tax cuts at a time of big budget deficits , Mr. Romney hardly offered a fulsome justification for his central economic policy. Three times he emphasized that while he wanted to lower tax rates, he would offset the lost revenue by ending or cutting back unspecified tax breaks elsewhere - yielding no net reduction in taxes.

“I don't have a $5 trillion tax cut.”

“I'm not looking for a $5 trillion tax cut.”

“Let me repeat, let me repeat what I said: I'm not in favor of a $5 trillion tax cut.”

His point was that he was not adding the sum to the annual deficits over a decade, that he could find a way around the political and policy difficulties of ending well-entrenched tax breaks to offset the lost revenue. But the specifics sometimes seemed lost to the thematic disavowals.

Here, too, Mr. Obama got in a jab: “Now, five weeks before the election, he's saying that his big, bold idea is ‘never mind.'”

Much like George W. Bush in 2000, Mr. Romney seized on the issue of e ducation to signal - especially to women, who lopsidedly support Mr. Obama - that he supports a muscular role for the federal government. In Republican primary debates, the popular answer, and one Mr. Romney has floated in the past, is to call for abolishing the Department of Education.

Mr. Romney did say the primary role in education should be at the state and local level.

“But the federal government also can play a very important role,” he said, adding, “The federal government can get local and state schools to do a better job.”

As for federal spending, “I'm not going to cut education funding,” Mr. Romney said. “I'm planning on continuing to grow.”

Election Exit Polls Are Eliminated in 19 States

By MARJORIE CONNELLY

The National Election Pool, the consortium created in 1990 that sponsors the exit polls for each election cycle, has decided for the first time in a presidential election year to reduce the number of states in which it will conduct surveys.

The consortium, which includes the television networks and The Associated Press, now contracts with Edison Research in Somerville, N.J., to survey voters nationally, within the 50 states, plus the District of Columbia.

The networks and The Associated Press have decided to omit exit poll in states deemed noncompetitive this year, taking into consideration the presidential, Senate and gubernatorial races, as well as referendums. Information about voters in those states â€" their age, race, sex and other pertinent data â€" will not be available for the future.

In 2010, the National Election Pool did something similar; it conducted exit polls in about half the states. Th is year, there will be exit polls in 31 states.

Increased cost is the driving force for the cutback. The budget for the exit polls is about the same as four years ago, according to Daniel Merkle, director of elections at ABC News, and a member of the committee that manages the National Election Pool. “We are simply shifting resources to get the best coverage we can: beefing up the national sample, beefing up the telephone polls, beefing up the battleground states,” he said.

More than 30 states have started early voting, requiring telephone polling to supplement the in-person election-day surveys. This year, the consortium has included plans to conduct telephone polls in 15 states, which adds to the cost of surveying a state. And the increased use of cellphones adds to the cost of telephone surveys.

The excluded states are: Alaska, Arkansas, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Kentucky, Louisiana, Nebraska, North Dakota, Ok lahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming.

Some precincts from these states will, however, be included in a broader national exit survey, so that voters in these states will be represented. The National Election Pool has increased the number of precincts sampled in the national survey to 350 this year from 300 in 2008.

The National Election Pool's decision to reduce the number of states it surveys this year was first reported on The Washington Post's Web site. The exit polls are now conducted for the National Election Pool by Edison Research. The New York Times is not a part of the consortium, but it and other news media organizations are subscribers to the surveys.

After the Debate, Campaigns Quickly Release New Ads

By MICHAEL D. SHEAR

The presidential campaigns quickly released new television commercials on Thursday morning, each hoping to build on - or move past - Wednesday's debate between the candidates, President Obama and Mitt Romney.

Mr. Obama's campaign used footage from the debate showing Mr. Romney denying that he has a $5 trillion tax cut plan.

“Why won't Romney level with us,” the ad asks. The ad suggests that it is because Mr. Romney would have to raise taxes on the middle class or make massive cuts in order to afford it.

“If we can't trust him here,” the ad says, showing a picture of Wednesday's debate stage, “how could we ever trust him here.” The scene shifts to a picture of the Oval Office.

Mr. Romney's ad asks the question: “Who will raise taxes on the middle class?”

It cites an “independent, non-partisan study” which concludes that “Barack Obama and the liberals” will raise taxes on the middle class by $4,000 per family.

It adds that the study, which was done by the American Enterprise Institute, a leading conservative research group, concluded that Mr. Romney's own tax plan was “not a tax hike on the middle class.”

The ad concludes: “Obama and his liberal allies? We can't afford four more years.”

Follow Michael D. Shear on Twitter at @shearm.

On Safeguarding Your Student Aid PIN

By ANN CARRNS

Loanlook, a Web site that aims to help students and families manage their educational loans, has added access to private student loans, as well as federal loans. That should, in theory, make the site more attractive to students and parents looking for a way to keep track of all of their student loans in one place.

But it appears the site may be operating counter to guidelines from the Department of Education's Office of Federal Student Aid, which warn student borrowers to safeguard their financial aid PINs and refrain from sharing them with anyone. That may be another reason for users to be wary of the site, which already faces skepticism because its parent company, the Ceannate Corporation, also is in the business of student loan debt collection.

As Bucks reported in August, Loanlook asks users to provide their four-digit federal PINs, which are assigned by the student aid office so students can gain access to information in the National Student Loan Data System. The PIN allows Loanlook to obtain information like loan totals and terms on behalf of the borrower so it can help suggest optimal repayment plans.

According to the Federal Student Aid PIN Web site, the PIN is used in combination with a birth date and Social Security number to allow access to federal student aid records online and to complete the Free Application for Federal Student Aid, or Fafsa, form.

“Your PIN can be used each year to electronically apply for federal student aid and to access your federal student aid records online,” the site says. “If you receive a PIN, you agree not to share it with anyone. Your PIN serves as your electronic signature and provides access to your personal records, so you should never give your PIN to anyone, including commercial services that offer to help you complete your Fafsa,” the student aid application. “Be sure to keep your PIN in a safe place.”

Given that warning, some readers, including a former student aid counselor, questioned whether it was acceptable for students to use their PINs to get access to loan information through Loanlook.

So I tried to ask the Department of Education this question: If I'm a student borrower who wants to use Loanlook's services, is it O.K. for me to enter my PIN on the site? I contacted the department's press office several times. Finally, after mulling the inquiry for more than five weeks, the office said it would not comment on Loanlook specifically - even though the site's parent, Ceannate, is a contractor with the department, providing services like student loan collections. But it e-mailed this response on Wednesday from Daren Briscoe, the department's deputy press secretary:

“As guidance posted for borrowers on the department's Web site advises - you should never give your PIN to anyone, including commercial services.”

Not exactly a ringing endorsement.

Loanlook officials maintain that the site complies with federal guidelines. Some students have access to Loanlook through their colleges and don't need to use their PINs. Students who come to the site individually do provide their PINs, but the site does not store them, to help guard against potential misuse, said Loanlook's chief executive, Balaji Rajan. Students must re-enter their PINs each time they want to update their loan information.

“Loanlook only uses the PIN as a one-time event to confirm the identity of the borrower and the borrower's right to access loan data,” he wrote in an e-mail. He added, “It is important to note that the PIN is provided only to facilitate Loanlook's services (as an agent and representative of the borrower) to access loan data, and for no other purpose.”

Further, he said, when registering on Loanlook, users give approval on a Department of Education disclosure form that allows release of their informa tion.

Still, Loanlook posted an update on its blog last week stating that the Department of Education now offers a feature, called “MyStudentData Download,” that provides an alternative to using the PIN. The feature provides a text version of a student's loan information that can be downloaded from the National Student Loan Data System site, and then transferred to third-party sites, like Loanlook. That sounds cumbersome, though it does get around the PIN problem.

“We expect that most of you will continue to retrieve your student loan data with your NSLDS PIN (generally the quickest way to refresh loan profiles on loanlook.com),” the Loanlook post said. “But you will soon have the option to upload the text file provided by NSLDS to your Loanlook account as well.”

What do you think? Would you feel comfortable using your financial aid PIN to use loan management sites like Loanlook? Or would you take the time to download your files?

Obama\'s Enthusiasm Gap

By MATT BAI

All the post-game punditry aside, President Obama didn't really blow Wednesday night's debate in any spectacular or memorable way, the way George H.W. Bush glanced at his watch, or the way Al Gore sighed dramatically. Mr. Obama's transgression was that he seemed to simply endure it. It was as if he had turned to his advisers at some point and said, “OK, I'll show up at this thing with Mitt, but I am not getting drawn into some kind of debate.”

In this way, Mr. Obama's performance, the first of three in any event, probably didn't change the essential arc of the campaign, which was always going to tighten in the final month. But it did tell us something about what many feel is missing from his presidency.

Watching the president grimace his way through the restrained back-and-forth reminded me of a conversation I recently had with a friend in Democratic politics, who posited that Mr. Obama simply doesn't love being preside nt. Not that he doesn't want the job or believe he should have it, or that its challenges don't give him plenty of cause for stress or solemnity - just that he doesn't appear to actually enjoy the daily business of running the country.

Mostly, what Mr. Obama seems to get no joy from, and what debates really demand of you, is the opportunity to persuade people that you're right, by making complex arguments sound simple and self-evident. This is why Bill Clinton's convention speech stood out as it did - because it reminded everyone of how powerful an enthusiastic presidential explanation can be.

Mr. Clinton can't rest until he's made the truth as plain to you as the sun and trees. It's always obvious how much he wishes he could have the big job for one more day, or one more hour. Mr. Obama can sleep just fine either way. It's hard to imagine him looking back five years from now with anything other than relief at being home.

Dur ing his first campaign, this lack of neediness was a significant strength for Mr. Obama. The last two Democratic challengers had been men perceived, fairly or not, as political changelings, insecure candidates who would throw on earth tones or camouflage pants in order to be loved. By contrast, Obama seemed healthy, a guy who approached the electorate on his own terms. He didn't appear to crave validation or to be exorcizing some childhood memory at our expense.

It turns out, though, that craving validation is a useful political trait. It makes you want to explain yourself and prevail in the argument. If you see every day as a new opportunity to prove to millions of people that your ideas are the right ones, then the presidency is downright fun, because there's no greater debate platform in the world. If you don't care to constantly repeat yourself or re-litigate the point, then the job has got to be sheer drudgery.

There have been a few times in Mr. Obama's term when he seemed to genuinely enjoy having the big argument of the day. You may recall his appearance in front of the Republican caucus in early 2010, when he took the fight directly to his opposition in a sparring, good-natured way. He seemed to be winning.

But these moments have been rare, which brings us back to Wednesday night's debate. The problem for Mr. Obama isn't that he seemed indifferent or peevish on stage, though he did. The problem is that it underscored what has too often been his countenance in office.

He came to Denver with no larger theme he wanted urgently to get across, no story to tell, no apparent passion for the chance to make himself understood and make his opponent look silly. He was there to defend his policies, but he wasn't going to get all needy about it, and no one was going to make him have an ounce of fun.

In contrast, Mitt Romney seemed eager to make his case, exhibiting some amount of apparent desperation, like the teenage s uitor who has 10 minutes to convince his girlfriend's father to bless the marriage. That desire to be understood counts for something.

And anyway, Mr. Romney's objective Wednesday was relatively modest. There's an old scene from the West Wing where the character played by Martin Sheen, running for his second term as president, pastes his flailing opponent in a debate. Afterward, as they shake hands, the opponent, a Southern governor played by James Brolin, tells the president: “It's over.” To which Sheen replies, “You'll be back.”

Mr. Romney's only real goal was to make sure that no one walked away from the first debate saying it was over, and no one did.

Mr. Obama's goal, it seems, was to indicate his continued willingness to serve in a job he believes he can do better than the other guy, but that doesn't really seem to enervate or enliven him. That's a problem, and not only for the duration of the campaign.

Obama Looks for \'the Real Mitt Romney\'

By MARK LANDLER

DENVER â€" President Obama, seeking to regain his momentum after a debate dominated by his challenger, Mitt Romney, accused Mr. Romney on Thursday of presenting a false version of himself and his proposals in their first head-to-head encounter, on issues from tax policy and Medicare to federal support for teachers.

In a spirited, often sarcastic speech to 12,300 at a lakeside park here, Mr. Obama said, “I met this very spirited fellow who claimed to be Mitt Romney. But it couldn't be Mitt Romney, because the real Mitt Romney has been running around the country, promising $5 trillion in tax cuts.” The Mr. Romney of the debate, he said, wants to put more teachers in classrooms and claims not to know that companies get tax breaks for outsourcing jobs.

“The man on stage last night doesn't want to be held accountable for the real Mitt Romney,” Mr. Obama said. “He knows full well that we don't want what he's been selling for the last year. If you want to be president, you owe the American people the truth.”

On a chilly, grey day, Mr. Obama seemed far more energetic than he had on Wednesday evening. Clad in khakis and a grey fleece, the president poked fun at Mr. Romney's threat to cut funding for the Public Broadcasting System and its signature children's character, Big Bird.

“Thank goodness someone is finally getting tough on Big Bird,” he said. “We didn't know Big Bird was driving the federal deficit.”

A supporter in the crowd cried, “Elmo,” another PBS children's character. “Elmo, too?” the president answered with a laugh.

How Lenders Make Money (and Create It Too)

October 4, 2012, 11:30 am

By PADDY HIRSCH

In this excerpt from his new book, “Man vs. Markets,” Paddy Hirsch, senior producer for personal finance at American Public Media's business radio program production house, Marketplace, explains the basics of lending from the bank's side of things.

Mr. Hirsch, perhaps best known for his series of whiteboard drawings and videos, leads the Marketplace team that produces two special newspaper sections and two hourlong radio shows each year in partnership with The New York Times.

Today most banks work this way: borrowing money from depositors at one rate of interest, and lending the money out again at another, higher rate of interest. And pocketing the difference.

You might think that makes ban kers pretty selfish. They pay measly rates of interest to their depositors and charge higher rates to people who want to borrow from them. In the end they're firmly focused on making a profit for themselves and their shareholders. The loans they make are a way to make that money.

Fortunately, the banks' lust for profits works to everyone's advantage.

The loans the banks make to companies and people usually do a great deal of good. The money helps us to buy everything from groceries to cars and houses, and it helps companies expand and hire. If people are able to borrow (and don't overstretch), the money they borrow can help grow businesses and create jobs, and that's good for everyone.

There's another benefit to banks' desire to lend money out in order to make profits: Lending creates money. Out of thin air!

This is how the magic works. One day, Mr. Smith comes to his bank and deposits $1 million. The bank keeps 10 percent, or $100,000, in reserve, in case Mr. Smith wants some of his money quickly.

The next day, Mrs. Jones comes to the same bank and asks for a $900,000 loan, to buy a private jet. The bank lends her the money. Suddenly the amount of money in the system has almost doubled. There's the million dollars that Mr. Smith has in his bank account. And there's the $900,000 loan the bank made to Mrs. Jones. Both are assets - Mr. Smith can point to his million-dollar balance on his statement, and Mrs. Jones has a briefcase full of cash - so both are real. The bank has turned a million dollars into $1.9 million, just like that.

Mrs. Jones drives out of the airport and gives the briefcase full of cash to Mr. Sharif, of Sharif Aviation. Mr. Sharif gives Mrs. Jones the keys to a gently used Bell 407 helicopter and puts the cash in his bank. The bank puts 10 percent ($90,000) aside as a reserve and lends $810,000 to a clothing manufacturer who needs to buy some new equipment. The clothing maker gives the equip ment salesman the $810,000. He takes it to his bank, which holds 10 percent in reserve, and . . .

You get the picture. That $1 million has now more than tripled, in terms of its purchasing power. And yet there's no new money in the system - it's still just a million dollars. It's the banks' ability to lend that money out, over and over, that creates a ripple effect through the economy and improves everyone's ability to spend and to grow. Lending and borrowing can be a good thing, in other words. So long as you don't overdo it.

Which means that banks aren't all bad. Yes, some banks - or the bankers who run them - do make mistakes. Some bankers cheat, some bankers lie, and some bankers take foolish risks that threaten the entire global economy. But most banks and bankers work to our mutual benefit, and the network of the country's banks has become an essential part of our economy, driving money through the system like a heart pumping blood around the body.

Ex cerpted from “Man vs. Markets: Economics Explained (Plain and Simple),” published by Harper Business. Copyright © Paddy Hirsch, 2012. Reprinted with permission.

On Health Care, Two Visions With Their Own Set of Facts

October 4, 2012, 10:00 am

By MICHAEL COOPER, ABBY GOODNOUGH and ROBERT PEAR

If there was one area where Mitt Romney and President Obama sometimes seemed to inhabit parallel universes at their debate on Wednesday night - with separate sets of assumptions, beliefs and even facts - it was on the question of health care and government's role in providing it.

Mr. Romney sharply criticized Mr. Obama's health care law, falsely suggesting that it would allow the federal government to “take over health care.” He painted a vision of a reshaped Medicare system in which the elderly would get fixed amounts of money to buy private or public plans, fostering competition. And he called for capping federal Medicaid spending and sending it to the s tates to decide how to spend it.

Mr. Obama noted the similarities between his health care law and the one Mr. Romney signed as governor of Massachusetts, saying: “It wasn't a government takeover of health care. It was the largest expansion of private insurance.”

He warned that under Mr. Romney's Medicare plan, private insurers would pick the healthiest seniors, endangering the public health plan by leaving it with the sickest, most-expensive-to-cover patients. And he described Mr. Romney's Medicaid cuts as “a big problem” for “a family who's got an autistic kid and is depending on that Medicaid.”

Two of their sharpest divisions came over how to insure people who are already sick, and what Medicaid should look like.

Mr. Obama said that if Mr. Romney repeals his health care law, insurers would no longer be required to provide coverage to people with pre-existing medical problems. Mr. Romney countered that “pre-existing conditions are cover ed under my plan.”

Mr. Romney made a similar claim in an appearance last month on NBC's “Meet the Press.” At the time, he said, “I'm not getting rid of all of health care reform. Of course, there are a number of things that I like in health care reform that I'm going to put in place. One is to make sure that those with pre-existing conditions can get coverage.”

But Mr. Romney's aides later clarified that he would only explicitly guarantee insurance for people with pre-existing conditions if they have maintained coverage with no significant lapses. That could exclude millions of Americans with conditions like cancer, heart disease and asthma.

Breaks in coverage are common. A recent report by the Commonwealth Fund found that 89 million Americans went without health insurance for at least one month in the period from 2004 to 2007, perhaps because they had lost jobs, been divorced or lost eligibility for a public insurance program.

For people wh o have not been continuously insured, Mr. Romney says many of them could get coverage through health plans known as high-risk pools. Many states have such pools, which generally operate at a loss. And the federal government is running a high-risk pool, as a temporary measure under the new health care law, in more than 20 states.

But Mr. Romney has not provided details, like whether or how he would regulate premiums or subsidize the high cost of coverage in a high-risk pool.

A 1996 federal law already limits the ability of health plans to exclude coverage for pre-existing conditions. But under that law, consumers may lose some of their rights if, for example, they do not buy an individual insurance policy within 63 days of losing group coverage. Mr. Obama said during the debate that Mr. Romney's plan only duplicates what is “already the law, and that doesn't help the millions of people out there with pre-existing conditions.”

The two men also differed ov er their vision for Medicaid, the jointly administered state-federal program that provides health care to nearly 60 million low-income individuals, including children and families, people with disabilities and seniors who need long-term care.

The federal government currently provides matching money to states based on how much they spend, so states with more generous benefits qualify for more federal dollars. Mr. Romney wants to cap the growth of Medicaid spending and let states decide how to spend it.

“I would like to take the Medicaid dollars that go to states and say to a state, you're going to get what you got last year plus inflation plus 1 percent,” he said at the debate. “And then you're going to manage your care for your poor in the way you think best.”

In a speech last November, Mr. Romney estimated that such a cap would save the federal government $100 billion a year.

Mr. Obama criticized the proposal at the debate, saying “Governor Romney talked about Medicaid and how we could send it back to the states, but effectively this means a 30 percent cut in the primary program we help for seniors who are in nursing homes, for kids who are with disabilities.”

He was relying on a study conducted by the Urban Institute, a nonpartisan research group, for the Kaiser Commission on Medicaid and the Uninsured. The study examined a 2011 proposal by Representative Paul D. Ryan, Mr. Romney's running mate, to transform Medicaid in essentially the same way Mr. Romney has called for.

Mr. Ryan's plan called for cutting federal spending on Medicaid by $810 billion over 10 years by turning Medicaid into a block-grant program. According to the Urban Institute study, federal spending on Medicaid under the Ryan plan would be 33.9 percent less over 10 years than it is projected to be under Mr. Obama's health care law, which would enroll millions of additional people in Medicaid.

Under a block-grant program li ke the one Mr. Romney has proposed, each state would get a fixed payment and more leeway to decide eligibility and benefits. (Currently, the federal government sets minimum requirements, like covering all children under the poverty level, which some states surpass. It also provides unlimited matching funds.)

Mr. Romney says, correctly, that the program's soaring costs are swallowing an ever-larger chunk of state budgets. States have generally not been allowed to cut Medicaid eligibility since the passage of Mr. Obama's health care law in 2010, but many have slashed optional benefits and payments to doctors and hospitals instead. Mr. Obama wants to vastly expand the program. During the debate, Mr. Romney stressed that his proposal would free up states to make their own decisions.

“One of the magnificent things about this country is the whole idea that states are the laboratories of democracy,” he said. “Don't have the federal government tell everybody what k ind of training programs they have to have and what kind of Medicaid they have to have. Let states do this.”

But critics of the block grant plan say it would shrink the medical safety net for the poorest Americans. The Urban Institute study estimated that under Mr. Ryan's proposal millions of people could lose Medicaid coverage by 2021.

Thursday Reading: Why Some Students Believe They Must Cheat

By ANN CARRNS

A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.