Debt ceiling threat: Time to take this political football off the field
CNN
23-05-17 16:31
The debt ceiling debate in Washington should be abandoned to save US living standards, family budgets, and global financial stability, according to economics experts. Theoretically, the debt ceiling should work as a fiscal restraint during the budgeting process. But after near meltdowns in 2011, 2013 and recently, economists argue it is time to take the political football off of the field. The CEO of JPMorgan Chase, Jamie Dimon said last week that he would be in favour of getting rid of the debt ceiling. The Fed's former vice-chairman, Roger Ferguson, said the debt ceiling is an antiquated mechanism that should be scrapped.
Investors are eagerly waiting for a long-term and effective drug for obesity to bring the companies that produce them a piece of the cake in a $100bn global market. The condition affects about one in eight adults around the world. Novo Nordisk and Eli Lilly are considered the front runners, with sales predicted to grow at a compound rate of 25% in the next three years. However, Pfizer, among other companies, could also benefit from high sales while insurers are monitoring the situation. Patients may need the drugs indefinitely, which is an attractive quality for investors, but this is also likely to increase the risk of side effects and misuse. On the upside, a Medicare ban on obesity drugs being lifted in the US could be costly, with treating 10% of obese over-60s estimated to be almost a fifth of its prescription drug benefit. However, it is a risky industry and pharmaceutical companies will need to tread carefully to avoid litigation and side effects.
Investors shouldn’t ignore this recession indicator
CNN
23-05-18 11:54
US retail sales for April rose by a muted 0.4% from March, according to the Department of Commerce, which were described by Neil Saunders, managing director of GlobalData, as the shallowest increase in 31 months. The data suggests a "consumer slowdown" is taking place, with households' debt levels reaching a record high of $17.05tn during Q1 2022. Debts have risen by $2.9tn since the end of 2019. Meanwhile, Home Depot reported a disappointing Q1 in which sales growth of 47.2% year on year marked a break in its three-year growth streak. Target reported lumpen earnings in its latest quarter, with total sales increasing by just 0.5% compared with a year ago, and digital sales falling.
The US Treasury has warned that it could run out of cash as early as 1 June, triggering the possibility that the US could default on its debt and cause worldwide economic trouble. The Treasury's cash coffers could run dry, leaving it unable to pay Congress' spending obligations and the day's $26bn in tax revenues would not cover roughly $101bn of payment obligations. The Treasury would need to borrow or default before making payments, effectively leaving soldiers and Medicare beneficiaries unpaid. By 15 June, the US Treasury is due to pay around $2bn in interest payments on the national debt.
Republican Congressman Clay Higgins yanked and shoved an activist who he claimed was mentally disturbed during a press conference outside the US Capitol. Jake Burdett, an activist with leftist political views, was filming and asking questions of the GOP lawmakers present when a man in a suit approached him, later to be revealed as Higgins. The footage of the altercation was shared widely on social media, prompting a Change.org petition calling for Higgins' arrest. Mr Higgins claims Mr Burdett was "threatening" and "a police code referring to mentally disturbed individuals".
The No Surprises Act, which came into effect in January 2022, aimed to eliminate surprise medical bills for patients who received non-emergency medical care at network facilities or emergency services at a hospital. The legislation barred physicians from billing patients for the cost difference between the insurer’s payment to the non-network doctor. It left the question of how much the insurer should pay the non-network doctor for such services. The Act established an untested system that mandated doctors and insurers, who have no contractual relationship with each other, to submit unresolved disputes to binding arbitration.
Federal regulatory bodies have iterated regulations and sub-regulatory guidance while defending the existing rules against legal challenges. The process has resulted in vacated critical provisions and a lack of clear standards to guide decision-making. The government’s unprecedented intrusion into the negotiations between non-contracting parties could have unforeseen consequences. While the law aimed to protect patients from surprise medical bills, it generated confusion among arbiters and regulators.
Lawmakers and economists argue that, instead of the complicated and poorly defined dispute-resolution process, the Congress should adopt a truth-in-advertising approach to enforce consumer protections. The proposed approach would protect consumers by obligating providers and insurers to represent a facility as in-network and would liberate doctors, insurers, and arbiters from a flawed system for resolving payment disputes that the disputing parties can best resolve themselves. Special interest groups who lobbied Congress developed a highly flawed system that affected patients, clinicians, hospitals, and insurers. The unprecedented government intrusion could have unforeseen and lasting consequences.
A group of Democratic lawmakers have proposed the Social Security Expansion Act, which aims to make Social Security solvent but would add to its liabilities with $33.8tn in new taxes. The benefit expansions include a permanent benefit increase across the board from 2024, a change of inflation measures which would result in larger cost-of-living adjustments, an increase of the minimum benefit, and continuation of the children's benefits through age 22. To pay for these increases and cover the program's existing $20.4tn shortfall, the act would impose three significant new taxes on workers, savers, and small business owners.
The Social Security Expansion Act’s proposal to eliminate the payroll tax cap would mean Social Security’s 12.4% tax rate, currently applied to the first $160,200 of worker’s incomes, would be added to all earnings above $250,000. This would subject all earnings to payroll taxes and would eliminate any illusion that Social Security acts like a pension where people get out of the program what they put in. The proposal would also bring the top federal tax rate on wages to 49.4% in 2024 and 51.8% in 2026 and beyond, and a new 12.4% investment surtax aimed at individual investments over $200,000 and married couples’ investments over $250,000.
The Expansion Act is intended to make Social Security solvent, but it could result in reducing output, destroying jobs, and restricting income growth that could otherwise have generated Social Security’s revenues. Additionally, if implemented, this could cause younger and future generations to be more dependent on government and less free to pursue their own goals.
US President Joe Biden's $7tn proposed budget for 2024 is a "shell game", according to Forbes. While Biden's administration thinks the Treasury needs more tax revenue to reduce the deficit, Forbes argues the country has a spending problem, not a revenue one. Tax revenue is at an all-time high, while spending has ballooned to unsustainable levels and has created record-breaking deficits. Instead of cutting spending, however, the White House is focusing on tax increases, leading to concerns from observers that these increases will end up being borne by the middle class. The proposed budget adds $5.5tn in additional tax over the next decade, according to the publication.
President Joe Biden’s Medicare proposals include old-fashioned tax increases and Medicare payment cuts, according to Devine D. Dr. S. who writes that in their 2021 report, the Medicare trustees stated their concerns. Dr. S. argues that increasing personal choice and intense competition between providers and plans should be implemented in Medicare reforms, building on the Medicare Advantage program's success. The writer also su.ggests that fixing the flaws in the payment system, expanding certain benefits that are not currently available, and allowing beneficiaries to access hospice coverage for end-of-life care could also lead to better reform of Medicare.
President Biden's latest budget increases Medicare's wasteful spending by increasing payroll taxes through another tax bracket while raising the tax rate for Medicare. This doubles down on the failed policies of the past and only postpones Medicare's ultimate insolvency to a later date. To preserve benefits for existing retirees and those set to retire soon, Medicare must become more flexible and competitive, but that does not mean "slashing entitlements." Flexible health savings accounts are an example of how people's incomes can be redirected to cost-effective health care. The longer it takes to change direction, the more painful the course correction will be, and the more draconian the cuts to benefits.
Kenneth Elliot, a surgeon who spent seven years in captivity in west Africa after being kidnapped by al-Qaeda, has been released and reunited with his family. Elliot and wife Jocelyn were running a 120-bed clinic in Djibo, northern Burkina Faso, when they were kidnapped by the terror group. Jocelyn was released after three weeks, leaving her husband as the only surgeon for the area's two million people in captivity. Foreign Minister Penny Wong said that Ken Elliott, 88, was safe and well. The Australian government worked tirelessly towards the surgeon's release, said Wong.
Australian Prime Minister Anthony Albanese has defended his government's "mature and orderly" approach to implementing policy, arguing its avoidance of rash promises would ultimately serve to deliver greater outcomes. Albanese, who won the federal election in May 2021, said the years preceding his election were characterised by a lack of action and that it was important that the government was sure any change would occur before it was promised. The leader of the Labor Party also suggested his government was successful because it had not over-promised in areas such as climate change policy, where Albanese stressed his government had achieved more than the previous, coal-supporting government.
Labour’s lasting popularity in the polls was linked to a focus on democratic governance and the commitment to following through on well-considered plans, such as extending parental leave, Albanese said. The opposition, led by Peter Dutton, has accused the government of breaking key election promises, such as the commitment to lowering power bills, but Dutton’s claims have been refuted by economists. The government’s most pressing issue is finding more housing options for Australians, but its plan to invest $10bn in building costs has been blocked in the Senate. Nevertheless, Albanese is confident that housing concerns would be addressed prior to the next election, which takes place in 2025.
A new study by 20,151 French adults found that as many as one in five people may have obstructive sleep apnoea (OSA), a condition severe enough to increase health risks. Despite being treatable, sleep apnoea can raise the risk of developing other health issues. For instance, a study by Flinders University showed that OSA could increase the likelihood of developing high blood pressure by up to 70%, while a study on mice highlighted how OSA disrupts breathing during sleep, depriving the brain of oxygen and causing the same degeneration of neurons that die in dementia. However, only around 20% of people with sleep apnoea are diagnosed, according to Lynn Bilston, principal research scientist at Neuroscience Research Australia.. Medical experts suggest seeking treatment as untreated OSA increases the risk of cardiovascular disease by 150%, diabetes by 60%, depression by 160%, road traffic accidents by over 200% and causes industrial accidents to rise over 50%.
A strata title property that's been built entirely after May 2019 is required by law to have a designated area for food waste within the complex's waste management systems. Such a move is encouraged but not compulsory for older buildings, however, in South Australia $14.6m (£8m) "Bin Trim" grants will encourage households, businesses and all types of housing complexes to reduce food waste. Funds have been granted to businesses like supermarkets and cafes as well as apartment buildings to boost participation in compost programs, and provide equipment such as storage containers and caddies.
US President Joe Biden has called on Republicans to move their position on raising America’s debt limit, warning a lack of agreement will result in a catastrophic default. Biden said a bipartisan deal was essential, but that Republican demands for spending cuts must be rethought. He is seeking to speak to US House Speaker Kevin McCarthy in the hope that a compromise can be made, though McCarthy said the White House was “moving backward in negotiations,” and that some cuts were essential to stabilising the country’s finances. The Fiscal Times reports that a US default could plunge the world back into recession.
In a recent article for The Guardian, travel editor Lee Tulloch describes how she lost her passport on a trip to New Zealand but returned to Australia without it by ensuring her identity was confirmed by phone by the Border Force, as well as using credit identity fraud prevention tools. Although she had to fly back to New Zealand to retrieve her passport, she stated the ease of her travel back to Australia without documentation and noted the help received from police and government officials keen to see the return of the passport also.
Passengers left without passports and finding themselves in foreign countries can apply for an "undocumented uplift", which allows them to travel without the correct documentation by producing other identification, such as a driver's licence or medicare card. An Australian journalist who lost his travelling document in Auckland discovered this option. However, he opted to gamble that his passport would turn up, waited for a week and then headed to the airport early, armed with the email the Auckland Airport Police sent him saying his passport had been found, so he could explain his situation.
