May Sacks UK Defense Secretary Over Huawei Leak

No. 10 has finished its investigation into the source of an embarrassing leak about a National Security Council vote to allow Huawei to help build out the UK’s 5G infrastructure despite Washington’s warnings and even some misgivings within the UK government itself.

As a result, the PM has decided to sack Defense Secretary Gavin Williamson, presumably because he was the source of the leak.

Gavin

In a statement, May thanked Williamson for his service, but said his conduct relating to an “unauthorized disclosure” out of the NSC.

The leak, which surfaced last week, prompted No. 10 to launch a diligent investigation. All cabinet members who attended the meeting were asked to deny being the source of the leak by Whitehall’s most powerful official, Cabinet secretary Sir Mark Sedwil, who was tasked with leading the investigation.

“The prime minister has this evening asked Gavin Williamson to leave the Government, having lost confidence in his ability to serve in the role of Defence Secretary and as a member of her Cabinet,” a Downing Street spokesman said. “The prime minister’s decision has been informed by his conduct surrounding an investigation into the circumstances of the unauthorised disclosure of information from a meeting of the National Security Council. The prime minister thanks all members of the National Security Council for their full co-operation and candour during the investigation and considers the matter closed.”

No. 10 confirmed almost immediately that Williamson would be replaced at the MoD by international development secretary Penny Mordaunt, who will become the UK’s first female secretary of defense…offering a welcome break from the interminable coverage of May’s disastrous negotiations with Labour, and the mounting internal rebellion against her rule.

Williamson was hardly a prominent figure in May’s cabinet, and his departure prompted the Twitter wits to crack a few jokes. 

 

 

 

 

 

 

 

 

 

 

 

 

via ZeroHedge News http://bit.ly/2LiBzin Tyler Durden

Party’s Over – Mortgage Refinancings Collapse Most In 6 Years Despite Falling Rates

The party’s over. Despite a reversal of the modest rise in mortgage rates in early March, mortgage applications continue to collapse.

Overall, mortgage applications fell 4.3% on the week, following last week’s 7.3% plunge; but refis tumbled 5.0% on the week…

 

In fact this is the biggest four-week crash in refinancings since March 2013…

Is the housing market really this sensitive to mortgage rates? If so, Jay Powell is in an even more serious box here than even he knows.

And with the market pricing in 30bps of rate-cuts in 2019, where can Powell go from here?

via ZeroHedge News http://bit.ly/2VHNJVG Tyler Durden

Overly Bullish Hedge Funds Set The Stage For Oil Price Drop

Authored by Tsvetana Paraskova for Oilprice.com,

For more than ten weeks, portfolio managers have been consistently amassing bullish bets in the most important petroleum futures contracts, as market fundamentals were pointing to OPEC over-delivering on the production cuts, Venezuela’s supply crashing, and potential losses from conflict-torn Libya, amid resilient global oil demand growth.

Last week, oil prices jumped on Monday on the news that the U.S. is ending the sanction waivers for all Iranian oil buyers. And hedge funds continued to bet on higher prices and a tightening oil market.

Source: John Kemp, Reuters

However, the net long position – the difference between bullish and bearish bets – in WTI and Brent begins to look too stretched to the bullish side, making oil prices vulnerable to declines now if (or rather, when) money managers decide to do some profit taking and liquidate some of their bets on rising oil prices, analysts say.   

According to data compiled by Reuters market analyst John Kemp, as of April 23, the latest available exchange data, hedge fund and other money managers held long positions in Brent Crude and WTI Crude that outnumbered shorts in a ratio of 11:1—the most lopsided bullish positioning since October 2018, when oil prices started crashing to lose 40 percent until the end of 2018.

Source: John Kemp, Reuters

Portfolio managers have now closed out nearly all short positions that they had started to open at the end of August last year, Kemp says.

Hedge funds have been continuously amassing bets on rising WTI Crude prices for the past nine weeks, the longest bullish-building trading sentiment since 2006, according to data from the U.S. Commodity Futures Trading Commission compiled by Bloomberg.

Source: John Kemp, Reuters

The number of long positions in WTI Crude increased by 1.7 percent in the week to April 23, while the number of short positions slumped by 18 percent.

Money managers continue to bet that the market will further tighten, leading to higher prices, but this now overstretched bullishness is setting the scene for a pause in the oil rally, according to analysts.

“There’s been a lot of hedge fund buying, a lot of speculative interest, and we probably need to hit the pause button for now,” Phil Flynn, a senior market analyst with Price Futures Group, told Bloomberg on Monday.

Oil prices already hit the pause button, after jumping to six-month highs at the start of last week when the U.S. took the market by surprise announcing the end to all Iranian sanction waivers.

On Friday, oil prices tanked nearly 3 percent as U.S. President Donald Trump said that he “called up” OPEC and told the cartel that they have to bring gasoline prices down.

“Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement,” President Trump tweeted later on Friday, but neither Saudi Arabia nor anyone else at OPEC appears to have spoken to the U.S. president.

While the U.S. and President Trump seem convinced that Saudi Arabia and other OPEC members will, once again, respond to Trump’s call to “increase oil flow,” the Saudis have been careful in statements about potential future production increases. Unlike last year, the Kingdom will not rush into pre-emptive increase in production unless it sees the actual number of barrels off the market, according to Saudi Energy Minister Khalid al-Falih.

“We are of the view that Saudi Arabia will increase output as soon as May, something they were likely to do anyway in the lead up to summer,” Warren Patterson, Head of Commodities Strategy at ING, said on Monday.

But even if the Kingdom were to raise its production by 500,000 bpd, it would still be complying with the OPEC+ pact because it has been over-complying with its share of the cuts by that amount. 

“In the past when the President tweeted about oil, OPEC and its oil cutting co-conspirator Russia dutifully raised output. They won’t do it again. Already they are saying in comments that before they raise output, they want to see a shortage of oil, increased demand or signs that Iranian barrels are coming off. I don’t think the phantom OPEC phone call, or a tweet is going to change that,” Flynn wrote on Monday.

Further reduction of Iranian oil supply, on top of the U.S. sanctions on Venezuela and fears of a supply outage in Libya, where rivaling armies fight for the capital Tripoli, continue to lend support to oil prices. But the already crowded bullish positions of the hedge funds are bearish for oil prices.

via ZeroHedge News http://bit.ly/2J7PcxV Tyler Durden

America Doesn’t Need Pete Buttigieg’s Forced Labor Scheme

Is forced labor on behalf of the federal government slavery? Democratic presidential hopeful Pete Buttigieg obviously doesn’t think so. Fretting to MSNBC’s Rachel Maddow about what he sees as the country’s lack of “social cohesion,” he called for one year of national service as a solution. No doubt he would take offense at any comparison of his scheme to chattel slavery—a comparison such as that offered by former slave Frederick Douglass.

“What is freedom? It is the right to choose one’s own employment. Certainly it means that, if it means anything,” Douglass thundered in response to Union General Nathaniel P. Banks’s policy as military commander of Louisiana of extracting one year of forced agricultural labor from freedmen on behalf of the federal government. “[A]nd when any individual or combination of individuals, undertakes to decide for any man when he shall work, where he shall work, at what he shall work, and for what he shall work, he or they practically reduce him to slavery.”

Frederick Douglass, who had personal experience of the horrors of slavery, knew how the institution differs from temporary forced national service—and yet he directly compared them and objected to both.

Strictly speaking, the 37-year-old Buttigieg didn’t explicitly call for conscription to build “social cohesion.” He allowed himself a little deniability by telling Maddow, “One thing we could do that would change that would be to make it, if not legally obligatory, but certainly a social norm that anybody after they’re 18 spends a year in national service.”

Does that mean Buttigieg wants a draft or not? It sounds like he wants 18 year-olds to just load themselves on the buses without the muss and fuss of an enforcement mechanism—but he’ll consider some arm-twisting if focus groups voice enthusiasm for the idea.

That enthusiasm may not be forthcoming. A 2017 survey by Gallup found 49 percent of Americans favoring the idea and 45 percent opposed. Unsurprisingly, support for mandatory national service rises among older cohorts who are highly unlikely to ever receive a draft notice, winning the nod from a solid two-thirds of those over 65. By contrast, the 18-29 year-olds actually targeted by forced labor schemes despise the idea by 57 percent to 39 percent.

Buttigieg seems to think that allowing a choice of civilian or military tasks to fulfill the whims of politicians addresses concerns about mandatory national service. But for many people it’s the “mandatory” part that poses the problem.

After General William Westmoreland objected that he did not want to command “an army of mercenaries” as he characterized paid volunteers when he and Milton Friedman famously sparred (PDF) over ending the draft during the Vietnam War, Friedman riposted, “would you rather command an army of slaves?”

Friedman’s effort to end the military draft was supported by economist Walter Oi, who argued on dollars-and cents grounds, but had personal experience with the evils of compulsion. At the age of 13, he’d been scooped up by the United States government and forced into an internment camp with roughly 120,000 other Japanese-Americans. “He had some pretty strong feelings about his imprisonment,” David R. Henderson, who knew Oi, wrote after the man’s death in 2013.

The roughly four million former slaves freed, as Frederick Douglass had already freed himself, from forced labor by the Civil War undoubtedly had “pretty strong feelings” about their former status (even as the freedom they gained remained incomplete). Describing slavery as “robbing the laborer of the hard earned results of his patient industry,” Frederick Douglass went on to tell his former master, in an 1855 letter, “In leaving you, I took nothing but what belonged to me, and in no way lessened your means for obtaining an honest living. Your faculties remained yours, and mine became useful to their rightful owner.”

While their bondage was nominally limited in duration, such sentiments would have been recognized by American sailors snatched by British press gangs leading to and triggering the War of 1812. While 9,991 Americans formally protested their conscription by British ships, perhaps 20,000 Americans were forced into service overall, making the practice the first-cited grievance by President Madison when calling for war against Britain. Impressment was no more popular with Britons—Admiral Horatio Nelson estimated that 40,000 sailors deserted the conscription-dependent Royal Navy between 1793 and 1801.

Later, the U.S. military had its own problems with unwilling conscripts (as well as regretful enlistees). Over 420,000 soldiers, sailors, marines and airmen deserted between 1966 and 1972, during the Vietnam War.

Forcibly extracting labor from the unwilling has a long history in this country, as does resistance to the same.

If forcing people to do labor that they wouldn’t do of their own accord is nothing new, neither is Buttigieg’s social-engineering grandiosity in pronouncing national service a boon to “social cohesion.” Such force-’em-for-their-own-good sentiments echo a 1967 Selective Service document that pronounced even the mere requirement of draft registration as a goad to “more effective human beings.”

But if history is any example, the only cohesion to be found will be that of shared resentment. And if the conscripts become more effective at anything, it will likely be defiance and escape.

It’s odd how a country with a miserable history of forced labor and two wars fought over the issue keeps revisiting the idea as if it’s a newly minted work of genius. But here we are, with Pete Buttigieg joining a long and disreputable list of pundits and public officials in polishing off this ancient policy turd and passing it off as a solution to what supposedly ails America.

Maybe Buttigieg and his ilk will decide that he never meant the idea of national service to be mandatory at all—or, at least, that it’s a good idea to distance themselves from the idea of extracting forced labor from the unwilling. Younger Americans will be able to relax again, at least for a while. And the rest of us will rejoice that decency has prevailed a little longer. The spirit of Frederick Douglass would likely join the celebration.

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America Doesn’t Need Pete Buttigieg’s Forced Labor Scheme

Is forced labor on behalf of the federal government slavery? Democratic presidential hopeful Pete Buttigieg obviously doesn’t think so. Fretting to MSNBC’s Rachel Maddow about what he sees as the country’s lack of “social cohesion,” he called for one year of national service as a solution. No doubt he would take offense at any comparison of his scheme to chattel slavery—a comparison such as that offered by former slave Frederick Douglass.

“What is freedom? It is the right to choose one’s own employment. Certainly it means that, if it means anything,” Douglass thundered in response to Union General Nathaniel P. Banks’s policy as military commander of Louisiana of extracting one year of forced agricultural labor from freedmen on behalf of the federal government. “[A]nd when any individual or combination of individuals, undertakes to decide for any man when he shall work, where he shall work, at what he shall work, and for what he shall work, he or they practically reduce him to slavery.”

Frederick Douglass, who had personal experience of the horrors of slavery, knew how the institution differs from temporary forced national service—and yet he directly compared them and objected to both.

Strictly speaking, the 37-year-old Buttigieg didn’t explicitly call for conscription to build “social cohesion.” He allowed himself a little deniability by telling Maddow, “One thing we could do that would change that would be to make it, if not legally obligatory, but certainly a social norm that anybody after they’re 18 spends a year in national service.”

Does that mean Buttigieg wants a draft or not? It sounds like he wants 18 year-olds to just load themselves on the buses without the muss and fuss of an enforcement mechanism—but he’ll consider some arm-twisting if focus groups voice enthusiasm for the idea.

That enthusiasm may not be forthcoming. A 2017 survey by Gallup found 49 percent of Americans favoring the idea and 45 percent opposed. Unsurprisingly, support for mandatory national service rises among older cohorts who are highly unlikely to ever receive a draft notice, winning the nod from a solid two-thirds of those over 65. By contrast, the 18-29 year-olds actually targeted by forced labor schemes despise the idea by 57 percent to 39 percent.

Buttigieg seems to think that allowing a choice of civilian or military tasks to fulfill the whims of politicians addresses concerns about mandatory national service. But for many people it’s the “mandatory” part that poses the problem.

After General William Westmoreland objected that he did not want to command “an army of mercenaries” as he characterized paid volunteers when he and Milton Friedman famously sparred (PDF) over ending the draft during the Vietnam War, Friedman riposted, “would you rather command an army of slaves?”

Friedman’s effort to end the military draft was supported by economist Walter Oi, who argued on dollars-and cents grounds, but had personal experience with the evils of compulsion. At the age of 13, he’d been scooped up by the United States government and forced into an internment camp with roughly 120,000 other Japanese-Americans. “He had some pretty strong feelings about his imprisonment,” David R. Henderson, who knew Oi, wrote after the man’s death in 2013.

The roughly four million former slaves freed, as Frederick Douglass had already freed himself, from forced labor by the Civil War undoubtedly had “pretty strong feelings” about their former status (even as the freedom they gained remained incomplete). Describing slavery as “robbing the laborer of the hard earned results of his patient industry,” Frederick Douglass went on to tell his former master, in an 1855 letter, “In leaving you, I took nothing but what belonged to me, and in no way lessened your means for obtaining an honest living. Your faculties remained yours, and mine became useful to their rightful owner.”

While their bondage was nominally limited in duration, such sentiments would have been recognized by American sailors snatched by British press gangs leading to and triggering the War of 1812. While 9,991 Americans formally protested their conscription by British ships, perhaps 20,000 Americans were forced into service overall, making the practice the first-cited grievance by President Madison when calling for war against Britain. Impressment was no more popular with Britons—Admiral Horatio Nelson estimated that 40,000 sailors deserted the conscription-dependent Royal Navy between 1793 and 1801.

Later, the U.S. military had its own problems with unwilling conscripts (as well as regretful enlistees). Over 420,000 soldiers, sailors, marines and airmen deserted between 1966 and 1972, during the Vietnam War.

Forcibly extracting labor from the unwilling has a long history in this country, as does resistance to the same.

If forcing people to do labor that they wouldn’t do of their own accord is nothing new, neither is Buttigieg’s social-engineering grandiosity in pronouncing national service a boon to “social cohesion.” Such force-’em-for-their-own-good sentiments echo a 1967 Selective Service document that pronounced even the mere requirement of draft registration as a goad to “more effective human beings.”

But if history is any example, the only cohesion to be found will be that of shared resentment. And if the conscripts become more effective at anything, it will likely be defiance and escape.

It’s odd how a country with a miserable history of forced labor and two wars fought over the issue keeps revisiting the idea as if it’s a newly minted work of genius. But here we are, with Pete Buttigieg joining a long and disreputable list of pundits and public officials in polishing off this ancient policy turd and passing it off as a solution to what supposedly ails America.

Maybe Buttigieg and his ilk will decide that he never meant the idea of national service to be mandatory at all—or, at least, that it’s a good idea to distance themselves from the idea of extracting forced labor from the unwilling. Younger Americans will be able to relax again, at least for a while. And the rest of us will rejoice that decency has prevailed a little longer. The spirit of Frederick Douglass would likely join the celebration.

from Latest – Reason.com http://bit.ly/2IRMz43
via IFTTT

Credo: The Rose Wilder Lane Story

Rose Wilder Lane was born on December 5, 1886, in the territory of South Dakota. Her early years were a hardscrabble settler’s life similar to that of her mother, Laura Ingalls Wilder, whose Little House novels defined the American frontier for many generations of young readers.

After an early career writing for newspapers and penning popular biographies of figures such as Jack London, Charlie Chaplin, Herbert Hoover, and Henry Ford, Lane worked with the Red Cross in Europe in the 1920s. She adventured through Albania and parts of the Middle East, usually with close female companions, then moved to the Ozarks in Missouri to care for her parents.

Throughout the 1930s, Lane assisted her mother with her fabulously successful series of children’s books. Her role was an unusual one—part agent, part collaborator—and her level of involvement remains a topic of bitter controversy among Little House fans, many of whom are ferociously protective of Laura Ingalls Wilder’s legend.

During that same period, under her own byline, Lane was a successful novelist and one of the most popular fiction writers for the Saturday Evening Post, a leading bastion of anti-Roosevelt, anti-New Deal sentiment. Lane worked with proto-libertarian editor Garet Garrett until he was no longer welcome at the publication, which reversed its stance after the Japanese attack on Pearl Harbor.

As war approached and the state grew, Lane saw her vision of old-fashioned American liberty on the ropes. In response, she produced one of the ur-texts of the modern American libertarian movement, 1943’s The Discovery of Freedom, a song of praise to human growth and political liberty’s role in furthering it.

Lane was a revolutionary; while believing America’s experiment in liberty arose organically from its frontier experience, she thought the American model could and should spread beyond the nation’s borders. America “is a totally new world,” she wrote. “This new world is an intricate interplaying of dynamic energies, a living network enclosing the whole earth and linking all human beings in one common effort, one common fate.”

In addition to The Discovery of Freedom, 1943 saw the publication of Isabel Paterson’s The God of the Machine, a nonfiction treatise on the nature and effects of liberty similar to Lane’s, and Ayn Rand’s breakthrough novel of individualism, The Fountainhead. As the journalist John Chamberlain put it, the three friends, “with scornful side glances at the male business community, had decided to rekindle a faith in an older American philosophy. There wasn’t an economist among them. And none of them was a Ph.D.”

The Little House books remain part of the American canon, with the Wilder family still standing as the template of the self-sufficient pioneer spirit. Lane herself was childless, but she had a habit of quasi-adopting young people, one of whom went on to change the political history of libertarianism: her “grandson,” the eventual Libertarian Party presidential nominee Roger MacBride. Though her own writing is now less well-known, Lane undeniably served as an intellectual foremother to a foundational generation of mid-century libertarian educators and activists.

—BRIAN DOHERTY

The following pages are excerpted from Peter Bagge’s graphic novel Credo: The Rose Wilder Lane Story by permission from Drawn & Quarterly. © 2019 Peter Bagge

from Latest – Reason.com http://bit.ly/2ISKC7y
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Civilization VI: Gathering Storm

Climate change has come to the granddaddy of world-domination computer games in Gathering Storm, the latest expansion for Sid Meier’s Civilization VI.

The good news is that the expansion’s emphasis on the environment is not crafted with an eye toward lecturing or berating the players for having the nerve to grow, expand, and succeed as nations. The series has always had a strong emphasis on not just world conquest but also scientific progress, and that’s how the game approaches global warming.

Players will, as they always have, build their way up through the industrial era, developing coal and oil as energy sources. In Gathering Storm, this results in the slow melting of the polar ice caps that can eventually result in parts of the coast flooding, destroying any developments in those areas. But it’s not a hopeless scenario: By pushing scientific research, players can develop technologies to reduce their carbon emissions and protect the coastlines. (Unlike real-world politicians’ Green New Deal, Gathering Storm grasps the role of nuclear power in fighting climate change.)

Even if players aren’t able to completely stop the warming, the world doesn’t come to an end. Players research tools that allow people to adapt, including speculative innovations such as seasteading. Work hard enough, and you can build offshore communities that grow and thrive.

Less successful is the game’s introduction of “corporate libertarianism.” While the description of this government type notes that its purpose is to maximize individual liberty and to use peaceful private contracts rather than state coercion, its implementation in the game has an odd emphasis on boosting your military. Worst of all, selecting this form of government incurs a penalty on scientific research, as though innovation can’t happen without government control.

from Latest – Reason.com http://bit.ly/2J7uBd3
via IFTTT

Credo: The Rose Wilder Lane Story

Rose Wilder Lane was born on December 5, 1886, in the territory of South Dakota. Her early years were a hardscrabble settler’s life similar to that of her mother, Laura Ingalls Wilder, whose Little House novels defined the American frontier for many generations of young readers.

After an early career writing for newspapers and penning popular biographies of figures such as Jack London, Charlie Chaplin, Herbert Hoover, and Henry Ford, Lane worked with the Red Cross in Europe in the 1920s. She adventured through Albania and parts of the Middle East, usually with close female companions, then moved to the Ozarks in Missouri to care for her parents.

Throughout the 1930s, Lane assisted her mother with her fabulously successful series of children’s books. Her role was an unusual one—part agent, part collaborator—and her level of involvement remains a topic of bitter controversy among Little House fans, many of whom are ferociously protective of Laura Ingalls Wilder’s legend.

During that same period, under her own byline, Lane was a successful novelist and one of the most popular fiction writers for the Saturday Evening Post, a leading bastion of anti-Roosevelt, anti-New Deal sentiment. Lane worked with proto-libertarian editor Garet Garrett until he was no longer welcome at the publication, which reversed its stance after the Japanese attack on Pearl Harbor.

As war approached and the state grew, Lane saw her vision of old-fashioned American liberty on the ropes. In response, she produced one of the ur-texts of the modern American libertarian movement, 1943’s The Discovery of Freedom, a song of praise to human growth and political liberty’s role in furthering it.

Lane was a revolutionary; while believing America’s experiment in liberty arose organically from its frontier experience, she thought the American model could and should spread beyond the nation’s borders. America “is a totally new world,” she wrote. “This new world is an intricate interplaying of dynamic energies, a living network enclosing the whole earth and linking all human beings in one common effort, one common fate.”

In addition to The Discovery of Freedom, 1943 saw the publication of Isabel Paterson’s The God of the Machine, a nonfiction treatise on the nature and effects of liberty similar to Lane’s, and Ayn Rand’s breakthrough novel of individualism, The Fountainhead. As the journalist John Chamberlain put it, the three friends, “with scornful side glances at the male business community, had decided to rekindle a faith in an older American philosophy. There wasn’t an economist among them. And none of them was a Ph.D.”

The Little House books remain part of the American canon, with the Wilder family still standing as the template of the self-sufficient pioneer spirit. Lane herself was childless, but she had a habit of quasi-adopting young people, one of whom went on to change the political history of libertarianism: her “grandson,” the eventual Libertarian Party presidential nominee Roger MacBride. Though her own writing is now less well-known, Lane undeniably served as an intellectual foremother to a foundational generation of mid-century libertarian educators and activists.

—BRIAN DOHERTY

The following pages are excerpted from Peter Bagge’s graphic novel Credo: The Rose Wilder Lane Story by permission from Drawn & Quarterly. © 2019 Peter Bagge

from Latest – Reason.com http://bit.ly/2ISKC7y
via IFTTT

Civilization VI: Gathering Storm

Climate change has come to the granddaddy of world-domination computer games in Gathering Storm, the latest expansion for Sid Meier’s Civilization VI.

The good news is that the expansion’s emphasis on the environment is not crafted with an eye toward lecturing or berating the players for having the nerve to grow, expand, and succeed as nations. The series has always had a strong emphasis on not just world conquest but also scientific progress, and that’s how the game approaches global warming.

Players will, as they always have, build their way up through the industrial era, developing coal and oil as energy sources. In Gathering Storm, this results in the slow melting of the polar ice caps that can eventually result in parts of the coast flooding, destroying any developments in those areas. But it’s not a hopeless scenario: By pushing scientific research, players can develop technologies to reduce their carbon emissions and protect the coastlines. (Unlike real-world politicians’ Green New Deal, Gathering Storm grasps the role of nuclear power in fighting climate change.)

Even if players aren’t able to completely stop the warming, the world doesn’t come to an end. Players research tools that allow people to adapt, including speculative innovations such as seasteading. Work hard enough, and you can build offshore communities that grow and thrive.

Less successful is the game’s introduction of “corporate libertarianism.” While the description of this government type notes that its purpose is to maximize individual liberty and to use peaceful private contracts rather than state coercion, its implementation in the game has an odd emphasis on boosting your military. Worst of all, selecting this form of government incurs a penalty on scientific research, as though innovation can’t happen without government control.

from Latest – Reason.com http://bit.ly/2J7uBd3
via IFTTT

Social Security will cross another dangerous milestone next year

In the year 1890, according to census records, my great-great-grandfather was spending the final years of his life living with one of his children on a farm in Choctaw County, Oklahoma.

I’ve spent most of the last twenty years doing some hardcore research into my family history– and I’ve identified records going all the way back to 1250 in England.

And one common theme that I’ve noticed: when people reached a certain age, they almost invariably moved in with their kids and grandkids.

This is what ‘retirement’ used to mean; it was simply expected that younger generations would look after older generations.

And back then, since households were quite large, there were usually 4-6 other people in the home to look after great-great-grandpa.

This arrangement might sound quaint and outdated. But it’s still the fundamental premise behind many retirement plans, including Social Security in the Land of the Free.

It’s still the younger generations taking care of the older generations. That’s the way the system functions: younger people pay taxes to fund benefits for older people who have retired.

So you can see the similarities:

Hundreds of years ago it would be your kids doing the work to take care of you in retirement. Today it’s everyone’s kids, collectively, doing the work to take care of every retiree.

Hundreds of years ago it took several other people in a household to care for the elderly. Today it takes a certain number of workers paying into the system to support each retiree receiving benefits.

They call this the ‘worker-to-retiree ratio’.

And the Social Security Administration (SSA) has said that they need a MINIMUM of 2.8 workers paying into the system for every one retiree collecting benefits.

You can probably see that maintaining this delicate balance requires steady population growth; every generation has to be large enough to support the previous generation.

If population growth trends get too far out of whack, it means there will either be too few workers, or too many retirees…

And that’s exactly what’s happening now: people are simply having fewer children.

In the Land of the Free, birth rates are the lowest levels EVER since they started keeping records decades ago.

And this has been a long-term problem: fertility rates were already in decline when the 2008 financial crisis accelerated the trend.

Researchers estimate that 4.8 million babies were never born as a result of the Great Recession.

Some of the reasons are pretty obvious– kids are expensive. And they aren’t getting any cheaper.

You used to be able to raise a family on a single income. Today, the average household can afford one, maybe two kids. And that’s with both parents working.

Unsurprisingly, as the fertility rate has fallen over the years, so has Social Security’s worker-to-retiree ratio.

It’s already dangerously low.

And next year there will be just 2.7 workers paying into Social Security for each retiree— below the minimum necessary to sustain the program. After that it will keep falling.

In 2034, when Social Security estimates its trust funds will run out of money, there will only be 2.3 workers per retiree.

And just to pile it on, technological automation is poised to radically change the workforce.

In 10-15 years, you’ll see entire professions replaced by robots and AI… neither of which pays into the Social Security system.

It’s not just the US that’s grappling with this either.

Finland’s fertility rate is below the US rate. They based their healthcare system on the same faulty assumption, that the population will continue to grow.

Yet now there aren’t enough young people paying into the system to support the older people who use more healthcare.

Most of Europe is even worse off. The combined EU fertility rate is just 1.59 babies over the course of a woman’s lifetime, well below replacement levels.

Japan is far more restrictive on immigration compared to the US and EU, and is on the cutting edge of automation. Japan’s fertility rate is just 1.4 and it has one of the oldest populations in the world.

The one-child policy that China had in place for decades is already putting a strain on the burgeoning middle class. By 2050, 44% of the population is expected to be dependent elderly.

We talk about this issue so much because it’s important to recognize that monumental change is coming. The entire way retirement is structured, since long before Social Security, is coming to an end.

You can’t rely on the next generation for retirement anymore. To be secure, you have to take matters into your own hands.

If you’re retired now, or are about to retire, you might be fine. You can probably ride it out before the entire system has to reset.

But if you’re 50 or younger, Social Security will run out of money before you’re able to start collecting.

The younger you are, the surer you can be that these retirement systems won’t be available to you. But that also means you have time to do something about it.

Several countries have options for self-directed retirement accounts. In the US, a solo-401(k) is a great option for anyone with side or self-employment income.

And in addition to the flexibility and freedom you have to invest with a solo-401(k), you get to contribute money before it’s taxed.

That’s important, because unfortunately, you are still going to be expected to pay into Social Security, even though you might never collect it.

And as the politicians try desperately to save these programs, you can expect to pay higher taxes.

Any money you can save on taxes and funnel into your private retirement account will be compounded year after year instead of flushed down the toilet.

And there is absolutely no downside in doing this. Worst case scenario: Social Security is miraculously saved, and you have extra money for your retirement. Not exactly a bad outcome.

Check out our recent podcast to see how you could use a solo-401(k) to tuck some extra money away for retirement.

Source

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