National / International News

Alan Simpson and Erskine Bowles -- the bipartisan pair that brought us a multi-trillion-dollar deficit reduction plan that was never enacted -- are out today with a new plan.

It targets Medicare and Medicaid for cuts, and curbs a number of tax breaks. It would reduce the deficit by about $2.4 trillion -- about halfway between what Democrats and Republicans want.

This proposal is their fourth effort in three years to drum up support for a deal to shrink America's debt. So, is there any reason the dynamic deficit reduction duo's plans could get traction now? 

Economist Gary Shilling says the political gridlock of today may actually make the new Bowles-Simpson plan more alluring.  With “neither side willing to budge” in the Whitehouse or Capitol Hill, Shilling says Bowles and Simpson may be able to play something of the knight-in-shining-armor role, “stepping in and offering a compromise that both sides will look at seriously.” 

Mark Zandi, chief economist for Moody's Analytics, doubts that Simpson and Bowles will have any impact on the immediate issues we're facing, such as the looming across-the-board budget cuts known as the sequester, set to hit in March.

“I think that's a train that's already left the station,” Zandi says of the sequester. But Zandi does think the new Simpson-Bowles plan could have an impact on future deficit negotiations.

“There's a lot more work to be done, and they could have a big role to play.”

The parents of a Derbyshire toddler who died after drinking his mother's methadone from a beaker are jailed for his manslaughter.

A Bolton magistrate receives a suspended prison sentence after admitting making fraudulent expenses claims of more than £22,000.

Google is reportedly in talks with payment companies such as Paypal, Visa and Mastercard to cut off funding to sites profiting from piracy.

A secretive branch of China's military is most likely one of the world's "most prolific cyber espionage groups", a US cyber security firm has said.

The Duchess of Cambridge makes her first official public appearance of the year at a drugs addiction charity in London after a series of apparently critical remarks by the Booker Prize winning novelist, Hilary Mantel.

A robbery at Brussels Airport in which millions of euros of diamonds were stolen as they were being loaded onto a plane, took just 11 minutes, an airport spokesman said.

Fifa says goal-line technology will be used at the 2014 World Cup in Brazil, after successful Club World Cup trial.

Russia opens a murder inquiry into the death of a three-year-old Russian boy adopted in the US, but the US says abuse allegations remain unproven.

A fighter plane crashes into a residential neighbourhood of the Yemeni capital, Sanaa, killing at least nine people, reports say.

England Women coach Gary Street makes three changes for Saturday's Six Nations match against France at Twickenham.

Since the banking crisis hit hard in 2008, Georgia has seen more than 80 banks go under. That’s more than any other state. Most have been small, community banks whose assets were tied to the housing market. But did those banks have to fail?

A new report from the University of West Georgia says in many cases, the answer is no. The reason so many did, the report finds, is because of an accounting rule called “mark-to-market,” which regulators put in place after the collapse of Enron.

Here’s how it works. Say you buy a house for $100,000. The economy tanks, and the value falls to $50,000. You keep paying on the hundred grand, but the bank must report on its books $50,000 -- the diminished fair market value of the asset.

“As the bottom fell out of the real estate market, with that rule in place, that has destroyed in an artificial way a lot of capital in banks,” says Danny Jett of the Georgia think tank Main Street Solutions.

The non-profit funded the University of West Georgia study looking at the effect of the mark-to-market rule on small banks.

“Context matters,” says Dr. Joey Smith of the University of West Georgia’s Richards College of Business. He found the mark-to-market rule doesn’t always paint an accurate picture of a bank’s solvency.

“You have to take into consideration what’s happening around the bank, and other banks, because it’s one big relationship,” he says.

The study’s findings show that in the recent crisis, banks had to unload loans that were bad on paper, although they may have been paid as agreed upon. And that created a snowball effect.

The rule was revised in 2009, but Smith says if mark-to-market isn’t revisited, we’re likely to see more community banks collapse in a future crisis.

Olympic and Paralympic sprinter Oscar Pistorius has been charged with premeditated murder in the death of his girlfriend, Reeva Steenkamp. Pistorius says he "had no intention to kill my girlfriend."

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A new board has been set up to improve a criminal justice system that does not deliver what the public "expect, want or deserve", a senior minister says.

A driver who collided with a car, killing a 13-year-old, while being pursued by police in south-east London is jailed for eight-and-a-half years.

Lloyds Banking Group is fined £4.3m for delaying compensation payments to 140,000 customers over Payment Protection Insurance (PPI) mis-selling.

Syrian conflict tears life apart for civilians on front line

Injured military personnel who have legs amputated are to be given the most up-to-date prosthetic limbs after the government set aside £6.5m.

The Organisation for Economic Co-operation and Development's economies shrank by 0.2% in the last quarter of 2012, dragged down by the eurozone crisis.

An autopsy is being carried out on a dead whale which washed up on the shore in southern Scotland.