Many worry Social Safety will run out of cash. Why that will not occur

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Most Americans are concerned about running out of Social Security during their lifetime, and those fears only got worse amid the Covid-19 pandemic.

That’s according to a survey by the financial services company Nationwide, which found 71% of adults feel this way. Fears about the benefit program were greatest among Generation X at 83% and Millennials at 77%, while only 61% of baby boomers agreed.

In addition, 47% of millennials said they believe they are “not getting a penny from the benefits they deserve”.

Many Americans – 59% – say they are more pessimistic now if the program is no longer supported after the pandemic outbreak. Meanwhile, 19% say Covid-19 caused them to rethink their plans to get benefits, with 11% planning to postpone filing and 9% planning to submit an earlier application.

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The trust funds that Social Security relies on to pay benefits have become scarce. The last official projection stated by the Social Security Administration that these funds could be used up in 2035, then 79% of the promised benefits would be payable. That estimate weighed all the effects of a pandemic.

Still, fears that the program would dry up and the performance reviews would end are unfounded, said Shai Akabas, director of economic policy at the bipartisan Policy Center.

“A lot of people hear the words bankrupt or bankrupt and automatically assume that the program will just go away,” Akabas said.

“The reality is that social security has been around for over 80 years and has more support than any other government function,” he said. “It’s very unlikely to go away anytime soon.”

While there is likely to be a solution, it takes Congress a long time to act. That can create uncertainty for Americans trying to plan their retirement, Akabas said.

The sooner the legislature acts, the less dramatic these changes can be. Higher taxes, benefit cuts, or a combination of both are among the adjustments they would likely consider.

“It’s not that serious or significant that the program will go away,” Akabas said. “But it’s also not a simple solution that we can wait for the last minute and just patch it overnight.”

Research suggests that benefit cuts would likely be less than 25% if they happen at all, said Joe Elsasser, founder and president of Covisum, a company that makes social security claims.

To calm these fears and enable people to plan, Covisum offers recently launched an online tool to show how cuts in social security benefits would affect a person’s monthly checks. It is noteworthy that the computer does not contain a scenario in which the advantages are completely eliminated.

“The probability that it will go to zero is as close as possible to zero,” said Elsasser.

Nationwide’s survey was conducted online from the Harris Poll between April 19 and May 7. It comprised 1,931 US adults.

Miami-style constructing collapse may occur in Australia

The collapse of the Champlain Towers in Miami, Florida should arouse both sympathy and fear. Florida is the birthplace of resort-style skyscrapers that have been copied in cities around the world, including Australia.

In the post-WWII economic boom, thousands of Americans faced the prospect of a comfortable retirement for the first time in history. To escape the harsh winters in the north, many were looking for a Florida second home with condos that perfectly met their needs.

With all the conveniences of a hotel and supposedly no home maintenance, condominiums have become the preferred option for retirees. When North American cities experienced post-industrial decline and baby boomers flew the nest, their parents often made Florida their permanent home. By the 1970s, the next generation had been seduced by the Florida lifestyle and flocked to the sunshine state by the tens of thousands.

The result was an unprecedented boom in housing construction. In 1975 there were as many homes in Florida as there were in the entire United States five years earlier. The boom was driven by developers who promised a lifestyle of sun, sand and relaxation. The reality was darker, however, as developers exploited buyers through a series of nefarious practices that threatened to implode the condominium market. The federal government had to intervene and conduct a study in 1975. Reading this report in Australia feels like marmot day. It documents misrepresentations by developers, complex sales contracts, missing guarantees, underestimated maintenance costs to increase sales, long-term exploitative management contracts and building defects. All problems in our own Strata market.

The primary solution Florida came up with was “Disclosure,” a practice familiar to anyone who has submitted an Australian housing contract that is a folder thick. Disclosure theory states that if a developer reports a specific problem to a buyer and the buyer buys anyway, then they cannot complain. The flaw with disclosure is that an exploitative, inefficient, or downright dangerous contract term doesn’t miraculously stop because it’s disclosed.

Florida has never solved the core problem of ongoing building repairs. In contrast to developer marketing, no building is maintenance-free, and with elevators, systems and equipment, a high-rise is infinitely more complex than a free-standing house. The repair must be agreed by the owners with different financial resources and purchase motives. Owners are paralyzed in this regard when the building has underlying defects. As US researcher Professor Evan McKenzie argues, ‘the entire institution of housing of common interest rests on the honorary directors, but they are unpaid, untrained, often unskilled, and almost entirely neglected by the governments whose work they often do supported. ‘ It is up to governments to ensure that buildings are flawless and built on stable, safe land, not the citizens.

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Australia has an advantage over the US, namely a single layer legislation that imposes repairs on the corporation. Our advantage ends here. Construction defects are common and many buyers buy into a world of pain. With all the excitement and noise about construction defects, one fundamental point seems to have been forgotten. It can be assumed that a brand new apartment building will be free of defects. Because builders are quite capable of building flawless buildings; they do this all the time in the commercial field. In the housing sector, they don’t because ownership is shared and they got away with it. The future consequences could be our own Champlain Towers. For the global housing market, Florida is the canary on the mine.

Cathy Sherry, UNSW Law and Justice, is the author of Strata Title Property Rights: Private Governance of Multi-Owned Properties.

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Echoing QAnon boards, Michael Flynn seems to recommend Myanmar-style coup ought to occur in United States – WISH-TV | Indianapolis Information | Indiana Climate

(CNN) – Michael Flynn, the first national security adviser to former President Donald Trump, appeared to be supporting a Myanmar-style coup in the United States on Sunday.

For months now, QAnon and Trump supportive online forums have been celebrating the deadly military coup in Myanmar, suggesting that the same should happen in the United States so that Trump could be reinstated as president.

Flynn made the comments at an event in Dallas on Sunday that attended prominent peddlers of the QAnon conspiracy theory and Big Lie.

“I want to know why what happened in Minamar (sic) can’t happen here?” Asked a member of the audience who identified himself as a Marine, Flynn.

“No reason, I mean it should happen here. No reason. That’s right, ”Flynn replied.

A message posted on Monday to a Parler account used by Flynn claimed Flynn’s words were twisted and he was not calling for a coup.

Attorney Sidney Powell, who has represented Flynn in the past, said Monday that he had in no way promoted “acts of violence or military uprisings.” She claimed the media “grossly skewed” Flynn’s comments. She didn’t explain why Flynn had answered the question the way he did.

Powell was present at a meeting in the Oval Office in the last few weeks of Trump’s presidency at which Flynn suggested that Trump could call martial law as part of his efforts to overturn the elections, CNN has reported. It wasn’t clear if Trump supported the idea, but others in the room forcibly pushed them back and shot them down.

Some QAnon followers are obsessed with the idea that the U.S. military will somehow get Trump back in office. Some believed and hoped that Trump would proclaim martial law on inauguration day to prevent Joe Biden from entering the White House.

Earlier this weekend at the same event in Dallas, Flynn falsely claimed, “Trump won. He won the referendum and he won the election of the electoral college. “

GOP Representative Liz Cheney from Wyoming, for whom Republicans recently voted in the House of Representatives, to be removed from their leadership position after publicly and repeatedly denying Trump’s election claims, tweeted Monday afternoon: “No American should advocate or support the violent overthrow of the United States.” A link to an article with the news of Flynn’s Sunday utterances accompanied the tweet.

Rep. Elaine Luria, a Virginia Democrat who is vice chairman of the House Armed Services Committee, said later Monday that Flynn’s comments were “dangerous” and “incredibly worrying,” adding that she believed official measures were taken against him should be considered.

“Flynn’s remarks border on rebellion. There is certainly some behavior that is inappropriate for an officer. These are both things that can be attempted under the Uniform Code of Military Justice, and I think as a retired military man this should certainly be a route that we believe has ramifications for those kinds of words, “Luria, a retired Marine commandant, said CNN’s Anderson Cooper on “AC360”.

Flynn is considered the hero of the QAnon movement. Last summer, Flynn posted a video with QAnon slogans. In a recent interview, Flynn tried to distinguish between the QAnon movement, known for outlandish conspiracy theories, and its followers: “What I tell people is to look at the people involved. Look at the values ​​they represent and let’s move on. “

The event in Dallas, entitled “For God & and Country Patriot Roundup,” had been planned for months. Concerns about the event contributed to the decision by the Department of Health and Welfare to transfer unaccompanied migrant children from a nearby location in the city, CNN Reported at the beginning of the month.

Powell, who has often spread the lie that Trump was re-elected, also appeared at the event, saying Trump should “just be reinstated” and that a “new inauguration day” will be set.

Talks among Trump supporters about a coup are not only taking place online; CNN spoke to supporters of the former president in Ventura, California in February who said they wanted to see a Myanmar-style coup d’état here.

Cash-Market Funds Face New Guidelines After Covid Stumble. This is What Might Occur.

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Dream time

While the race in cash At the start of the pandemic, investors pulled cash from money market funds that invest in short-term corporate and municipal debt. That has regulators again concerned about the stability of the sectorand they are considering further rule changes to support them.

In March 2020, investors withdrew $ 125 billion from high-quality funds investing in short-term corporate bonds and $ 9 billion from tax-free money market funds, US officials wrote in a December report. Investors pulled less cash on an absolute basis than they did during the 2008 financial crisis, when a huge prime fund “broke the money” when its share price fell below $ 1. However, with the industry’s asset base lower in 2020, withdrawals made an even larger proportion of the industry’s total size.

Although the market did not repeat itself in 2008, investor exit exacerbated the pressures in the short-term corporate and local finance markets and prompted the Federal Reserve to do so step in and create a facility dedicated to money market funds. This follows two rounds of regulatory efforts to prop up money market funds after the financial crisis.

After renewed burdens last year, officials like Fed Chairman Jerome Powell are now discussing the prospect of new rules to limit the need for future intervention. “We are looking for ways – and people around the world are looking for ways – to make these vehicles resilient so that they don’t have to be backed by the government when market conditions are tough,” he said at the central bank press conference on April 28th . April.

As the regulatory process progresses, strategists join in

Bank of America

hinder the likelihood of different changes.

US Officials suggested a list of 10 Possible reforms in their December report and in a May 6 release are categorized by analysts at the bank into three main categories.

The first group would ease the threshold at which funds would have the ability to penalize redemptions from investors. After the stress on money market funds during the financial crisis, regulators put in place a rule that money market funds can charge fees or goals if their cash equivalents fall below 30% of their portfolio.

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Each weekday evening, we highlight the resulting market news of the day and explain what is likely to be important tomorrow.

One of the regulators’ proposals would allow money market funds to collect gates or fees if the board of directors decides that it is in the best interests of the fund, regardless of the size of its cash. This idea was popular with money market fund managers who responded to the government report, Bank of America found. All 14 respondents supported the idea.

The second set of proposals is to encourage either fund management companies or investors to pay to offset the risk of future runs. For example, officials are considering new rules detailing exactly when and how a fund’s parent company would be required to support their funds, for example by providing liquidity to cover investor withdrawals.

Third, regulators are considering a group of ideas to reduce the likelihood that investors will withdraw their money in the first place.

One of the options in this category would be a new rule that would reduce the incentive for an investor to try to get their money out of a fund first. In essence, the rule would introduce a delay before an investor could cash out a certain portion of their stock. This means that an investor who withdrew prematurely would still be involved in the losses if a fund ran.

While most money market fund managers didn’t endorse the idea, Bank of America said “it has some potential” although it “could make it less attractive to invest in top quality or tax-exempt money market funds.”

Another proposal could fundamentally change the expectations of individual investors in certain types of money market funds: regulators suggested allowing the price of retail investor stocks to fluctuate or, under certain conditions, move their prices up and down with market conditions instead of staying at 1 USD per share. This would reflect a rule change from the post-financial crisis, when officials introduced rules that allowed stock prices to float for institutional investors’ stakes in high-quality, tax-free money market funds.

Of course, these rules would only apply to money market funds that invest in short-term corporate or municipal debt. So it seems possible that this set of rule changes, like the last round of reforms, will continue to push investors into money market funds that invest in US government bonds.

In short, “there are changes coming in high-quality, tax-exempt money market funds,” wrote Bank of America, “which we believe will undermine investor interest in these funds.”

Write to Alexandra Scaggs at alexandra.scaggs@barrons.com

May Texas-style blackouts occur in New England? Unlikely, however the disaster is a warning name

Our network also has its weaknesses, thanks in part to its reliance on natural gas. Few people know how close ISO New England has come to implementing rolling power outages – the nonprofit operator prefers to call them “controlled outages” – to protect our stressed network in the winter of 2017-2018. While ISO New England continues to take steps to ensure the juice flows smoothly during the colder months, there are no guarantees.

However, do take into account New England’s relative strengths.

The Texan network is essentially an island that is largely independent of the surrounding states and Mexico in the south. While some power lines cross the borders, they are not suitable for heavy import and export. The New England network is also an island, but one with many bridges to the outside world. Almost 20 percent of our strength in 2019 came from our neighbors: New York, New Brunswick, Quebec. In times of need, ISO New England may reach out to them for help, although they may face similar weather conditions.

Our power plants are simply better prepared for chattering temperatures. Federal agencies warned of catastrophic consequences in Texas when the infrastructure was not properly winterized after a cold snap in 2011. These warnings were largely ignored.

Here the power plants are insulated and heated. Meters and other devices use lubricants that do not freeze. The pipelines that deliver gas to generators are deeper underground here than in Texas, making them less prone to cold weather disruption, said Dan Dolan, executive director of the New England Power Generators Association.

Our water and sewer lines have similar safety precautions that their colleagues in Texas apparently lacked: emergency power generators in sewage treatment plants and pumping stations, and pipes buried below the frost line.

Another key difference is the so-called capacity market. New England power plant owners offer payments in this market so that they can be called three years later in times of peak demand. Texas does not have such a system.

It is an expensive insurance policy for New England Ratepayers and a source of much debate in the energy community. David O’Connor, energy lobbyist for ML Strategies, says: The question has always been whether it is worth the cost. He quotes the old adage: insurance always looks expensive until you need it.

Critics say this system enriches power plant owners without necessarily guaranteeing that the plants can be turned on when they are needed most.

For some experts like Anbaric manager Theodore Paradise, this insurance policy hardly seems worthwhile. Paradise, a former ISO New England attorney whose current firm is a transmission line developer, said the cold weather power plants still in operation could fetch extremely high prices in the Texas wholesale market. This potential windfall should be an incentive for the savvy operator to prepare for the worst.

However, Dolan, the executive director of NEPGA, said the important promise of future payments in the capacity market will facilitate the funding of infrastructure construction in New England, including those that will help ward off winter disruption.

Alicia Barton, managing director of hydropower and solar operator FirstLight Power, is among those concerned that the existing market environment is encouraging too many older fossil fuel systems to stay close. She would prefer rules that eventually push these crops aside in favor of more renewable energy and storage. After all, it is climate change accelerated by fossil fuels trigger extreme weather events like the one in Texas. Better to be part of the solution than part of the problem.

The managing director of ISO New England, Gordon van Welie, knows this well. The ISO warned of insufficient gas pipelines in winter, as heating customers have priority over the power plants. But van Welie said policymakers in New England states are aware of the need to wean the region off of natural gas, and his team is trying to do its part to lead that debate.

It will not be easy. Now the region’s policymakers want to convert cars and heating systems to electricity for similar environmental reasons. New England electricity needs could double in the next 30 years. New generators are planned – especially in offshore wind farms. But will they be enough?

Unlike its Texas counterpart, ISO New England has never resorted to widespread power outages. Nevertheless, there were close calls, for example during a two week cold snap about three years ago. Many natural gas-fired plants were converted to oil fuel at the time, while rarely used “peakers” were put into operation, causing the region to run out of fuel oil.

Over the years, according to Van Welie, ISO New England has incentivized power plants to supply themselves with fuel and improved training and communication protocols to reduce the load on the grid in cold weather. Luck also played a role. But we cannot rely on luck forever.

As with previous massive blackouts, there will be tragedy in Texas. The industry experts will again examine how they can protect their respective network corners from the inevitable wild weather. For the rest of us, the lesson may be this simple: it’s easy to take electricity for granted when you flip the switch, as long as it’s there.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @ Jonchesto.