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Sunday, December 17, 2023

Burned Out Boomers Part 11 - Late Boomers

image: retirement gift
 
Due to changes in the retirement landscape in recent decades, Late Boomers (who are now nearing retirement) would be expected to have less wealth from traditional pensions, Social Security, and housing, but higher 401(k)/IRA assets compared to Mid Boomers at the same age. Strikingly, though, Late Boomers have seen a drop in their 401(k)/IRA assets. The questions are why is their 401(k)/IRA wealth lower and what do the patterns mean for younger cohorts.
- Why do late boomers have so little wealth and how will Gen-Zers fare, Center for Retirement Research at Boston College, May 2023
 
Baby boomers have the highest median net worth by generation, holding about half of U.S. wealth - with much of it tied in real estate. And while many of these older boomers arent moving out of their homes, younger boomers reaching retirement are increasingly facing homelessness. Watch the video HERE.
- Burned Out Boomers Part 10 - Senior Homelessness, July 2023

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Younger baby boomers face deep shortfall in retirement savings

By Nathan Place
Financial Planning
November 8, 2023

Not all boomers are OK. When it comes to retirement savings, younger baby boomers have significantly less than their older counterparts.

That’s according to a study by the CENTER FOR RETIREMENT RESEARCH AT BOSTON COLLEGE, which uncovered a striking difference between “late boomers” - those born in 1960 to 1965 - and “early boomers,” born in 1948 to 1953. By the time they reached their 50s, the study found, the late boomers had 19% less retirement wealth than the early ones did at the same age.

What could explain this wealth gap? Several demographic and economic shifts contributed, the study said, but the main reason was the 2007-2009 financial crisis.

“The late boomers were hit really hard by the Great Recession,” said Anqi Chen, one of the study’s co-authors. “It was the earnings lost during the recession that really set them back.”

Why was the downturn more damaging for late boomers? It’s a matter of life stages. Typically, Chen said, Americans reach their peak earning years in their 40s and early 50s. But for those at the younger end of the baby boom, those were exactly the years when the economy was in crisis - in 2007 to 2009, late boomers were somewhere between 42 and 49 years old.

And that’s not even including the economy’s long, slow recovery. Unemployment in the U.S. didn’t return to pre-recession levels UNTIL DECEMBER 2017, according to the U.S. Bureau of Labor Statistics.

In the meantime, late boomers took a huge hit to their nest eggs. Just as their careers were gaining steam, many of them lost their jobs. At age 50, only 77% of late boomers were working, compared with 96% of early boomers at the same age. That meant they lost access to retirement plans, sometimes for years and in many cases, they never got it back.

“What was interesting was that not only did you see that drop, but it didn’t pick back up later,” Chen said. “A lot of people lost their jobs, and then they had a hard time reentering the workforce.”

In addition, something else set this age group apart. Unlike their predecessors, late boomers worked and saved at a time when PENSIONS WERE NO LONGER THE DOMINANT RETIREMENT PLAN. Instead, they had defined-contribution plans like 401(k)s and IRAs ח and that meant their retirement income was not guaranteed.

This daunting combination is familiar to many financial planners with late boomer clients.

“Late boomers had a double whammy between the Great Recession and the shift to 401(k) plans,” said Jay Zigmont, founder of CHILDFREE WEALTH in Water Valley, Mississippi. “As the first group to truly embrace 401(k)s as their primary retirement savings, this can be very dangerous. Not working during peak retirement saving years can set people back years on their retirement.”

The irony is that at the beginning of their careers, late boomers were actually doing better on their retirement savings than early boomers had done. At age 44, the average early boomer had just $7,011 in their 401(k) or IRA. At the same age, the average late boomer had $29,355.

But in the years that followed, this gap dramatically flipped. By age 56, the average early boomer had $75,378 in their retirement plan, while the average late boomer had only $37,464 - less than half as much.

“When we look at their average 401(k) and IRA balances at younger ages, we see that late boomers were actually ahead of other cohorts,” Chen said. “And then you see that drop.”

To calculate boomers’ total retirement savings, the CRR added the balances of these defined-contribution retirement plans together with those of defined-benefit plans, like pensions, and with Social Security benefits.

All told, the average late boomer ended up with a retirement nest egg of $279,686. The average early boomer, by contrast, had $345,648 - a 19% difference.

The study examined several potential reasons for this. Demographically, late boomers are a more diverse group than early boomers, and BLACK AND HISANIC HOUSEHOLDS TEND TO HAVE LESS WEALTH THAN WHITE ONES.

But as it turned out, this did not explain the savings gap. In fact, among Black and Hispanic workers, retirement wealth was actually higher for late boomers than it was for early ones - the opposite of the overall trend.

The real reason, Chen said, was crystal clear.

“The Great Recession is the culprit here,” she said.

What can late boomers do about it? In many cases, they’ll need to do more than other generations to catch up on their savings with financial advisors’ help.

“Chances are that we are going to have to help our clients plan on working longer or saving more now to make up for the deficit,” Zigmont said. “We need to start having those conversations now and helping our clients to make the hard choices.”

Another option is to change one’s retirement plans to cut costs.

“If they live in a place with a high cost of living - especially housing - then they could consider moving somewhere cheaper,” said Ron Strobel, founder of RETURE SENSIBLY in Meridian, Ohio. “That could help shore up their retirement savings quickly.”

And in the case of someone who sold their assets during the worst of the Great Recession, it’s important to get back on track 0 no matter how painful it may be.

“Bite the bullet, stick to your long-term plan, and get invested again,” said Noah Damsky, co-founder of MARINA WEALTH ADVISORS in Los Angeles. “This will ensure you have as successful a future as possible.”

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Posted by Elvis on 12/17/23 •
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Wednesday, April 05, 2023

Double Whammy Rate Hikes For Floridians

image: energy company gouging

Rate hikes approved for Tampa Electric, Duke Energy Florida, and Florida Power and Light
A collaboration of at least 10 advocacy organizations in Florida have launched a campaign to mobilize the Hillsborough County Commission to push back against rate hikes driven by fossil fuel prices.

By Jessica Meszaros
WUSF News
March 7, 2023

The FLORIDA PUBLIC SERVICE COMMISSION, which regulates private utilities, APPROVED RATE INCREASES for three electric companies that serve the state during its Tuesday meeting.

Two new rate hikes for TAMPA ELECTRIC, or TECO, were permitted: one is due to the volatile cost of the fossil fuels it uses to generate electricity, and the other is to recoup nearly $131 million of storm expenses from seven weather events in 2022. Although, clean energy activists point out that only two severe weather events impacted the utility’s service area.

Tampa Electric customers can expect their energy bills to increase by 9.8% starting in April. By then, the average customer’s bill will have risen 62% from 2019 - from $99.53 to $161.13.

In April, the Tampa utility will submit their 10-year plan, which advocates consider a key opportunity to see what other fossil fuel projects and rate hikes they have in store

The commission also approved an increase of 15.1% spread over 21 months for DUKE ENERGY FLORIDA. Due to that longer time frame, the actual monthly increase visible on energy bills will be 3.8%.

In addition, FLORIDA POWER AND LIGHT will increase rates in their northwest territories by 8.3%, and in the peninsula by 10.3%.

“Florida’s stubborn reliance on fossil fuels is gouging residents and businesses, as Floridians pay through the nose to keep our corporate utilities profitable at any cost,” Brooke Ward, senior Florida organizer for Food & Water Watch, said in a press release. “As our energy bills rise, so too does the sea level and our climate emissions. We need less fracked gas not more - Floridians can’t keep footing the bill for more costly fossil fuel infrastructure.

“Rising rates are only the latest symptom of our fossil fuel-dominated system that privileges corporations over communities and climate. In Tampa Bay, our local governments have passed bold resolutions to keep fossil fuels out of our communities and push back against TECO’s profiteering - it’s time for the Hillsborough County Commission to follow suit.”

Food and Water Watch launched a campaign last month to mobilize the Hillsborough County Commission to push back against “the fossil fuel and corporate greed driven rate hikes that have been lashing not only Tampa Bay residents, but Floridians statewide.”

The national nonprofit is partnering with TAMPA ECOSOCIALISTS, FLORIDA RISING, FLORIDA STUDENT POWER NETWORK, CENTRAL FLORIDA JKOBS WITH JUSTICE, the CLEO INSTITUTE, FLORIDA CONSERVATION VOTERS, TAMPA BAY DISASTER RESILIENCY INITIATIVE, SIERRA CLUB, and TAMPA BAY CLIMATE ALLIANCE - itself a consortium of 35 local groups.

SOURCE

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Florida homeowners will face a projected 40 percent increase in property insurance rates
Floridians are bracing for additional rate hikes as they are already paying higher monthly payments than homeowners in other states.

By Gabriella Paul
WUSF News
April 4, 2023

Property insurance rates in Florida are predicted to jump at least 40 percent in 2023, according to the INSURANCE INFORMATION INSTITUTE.

Mark Friedlander, the institute’s director of communications, said these increases come as Floridians are already paying more than homeowners in other states.

“Right now, Floridians pay arguably the highest average premium in the U.S.,” he said.

Friedlander said the average Florida homeowner is paying $4,231 for their property insurance, which is nearly triple the national rate of $1,544.

The growing cost of catastrophes has led to increased rates across the country. In Florida, the roughly $60 billion in INSURED LOSSES from Hurricane Ian and the fact many insurers have left the state have caused property insurance rates to increase.

In February, Tampa-based United Property & Casualty Insurance Co. was the seventh private insurer to face insolvency in Florida. Of the roughly 135,000 policies with UPC, Friedlander said its estimated there’s around 20,000 outstanding claims from Hurricane Ian.

The state-backed Citizens Property Insurance Corp. absorbs policies that are dropped by private insurers. It is predicted to hit a record of 2 million policies in 2023.

“So, it’s a really bad situation for so many Florida homeowners right now,” he said.

Florida’s projected rate hikes are also outpacing national increases.

In Florida, homeowners are bracing for property insurance rates to climb by double digits for the second year in a row, according to Friedlander. In 2022, rates climbed 33 percent compared to the national rate increase of 9 percent.

Pinellas County had the highest rates in the greater Tampa Bay region last year, at nearly $3,000, and it is expected they will rise further in 2023. In Hillsborough County, annual premiums for property insurance are estimated to jump from an average of $2,500 to $3,500.

Insured homeowners can expect renewal notices, including any rate increases, to be delivered 60 days before their policy start date.

Projected increases to property insurance premiums in 2023, by county

Florida homeowners are expected to see their property insurance rates jump 40 percent in 2023, according to the Insurance Information Institute.

Arrows point left to right for seven counties listed. They show the forty percent increase in property insurance rates between 2022 and 2023.

 
image: florida insurance rates 2022-2023
 

The prospect of another year of increases has left many Florida homeowners feeling financially vulnerable.

“How many Floridians are living paycheck to paycheck?” Friedlander asked. “They can’t afford to see these mass increases every year.”

At this rate, Friedlander said the climbing cost of property insurance is not sustainable for some Floridians to maintain their homes.

Ahead of the 2023 hurricane season, which begins June 1, Friedlander urges Floridians to resist reducing or dropping their coverage. Although saving money on the front end is tempting, he warns that being underinsured or uninsured after a storm like Ian can leave homeowners in a lurch.

“We saw this happen to many homeowners that were hit by Hurricane Ian,” he said. “They had reduced their coverage because it was getting too expensive, and now theyre in a much worse financial position than they were before the storm.”

Legislative changes made during December’s emergency special session could cause the rate increases to slow, Friedlander said.

“The 2022 legislation will move the Florida property/casualty market toward stabilization, but policyholders’ premium rates will not be coming down any time soon,” according to the REPORT from the INSURANCE INFORMATION INSITUTE.

“It could take as long as 18 months for consumers to feel the real impact of the rule changes,” he said.

To reduce the cost of premiums in the meantime, Friedlander advises homeowners to bundle home and auto insurance, increase deductibles for a lower monthly rate and inquire about deals like loyalty or senior discounts.

Gabriella Paul covers the stories of people living paycheck to paycheck in the greater Tampa Bay region for WUSF. She’s also a REPORT FOR AMERICA corps member. Heres how you can SHARE YOUR STORY with her.

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Posted by Elvis on 04/05/23 •
Section News • Section Dying America • Section Next Recession, Next Depression
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Thursday, October 13, 2022

Social Security 2023 COLA

image: social security card

The 2023 COLA is based on the increase in the Consumer Price Index for Urban Wage Earners (CPI-W) between the third quarter of 2021 and the third quarter of 2022 meaning it looks backwards at inflation and was sealed this morning when the Bureau of Labor Statistics reported September’s inflation rate. 
- Social Securty 2023 Jump, Forbes, October 13, 2022

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How the CPI-E Compares With the CPI-W for the Annual Social Security COLA

By Devin Carroll
Social Security Intelligence
October 13, 2022

If the annual cost of living adjustments to benefits would have been based on the CPI-E, instead of the current CPI-W, the benefit increase in 2022 would be 1.1% lower!

Recently, the Social Security Administration announced yet another Social Security cost of living adjustment. And once again, the amount of the adjustment left some wondering why it wasn’t higher.

The announcement ignited the same conversation and questions as it does every time. In the comments of my videos, MY FACEBOOK GROUP, and on my website, many people say things like, “My expenses have increased a lot more than this cost of living adjustment,” or, even more commonly, “There has to be a better way to measure the increases to living expenses than the way it’s being done now!|

Given that it’s such a common response to the usual Social Security cost of living increases, I want to cover the proposal that may change how these adjustments are calculated.

How Social Security Benefits Cost of Living Adjustments Are Made Today

Right now, Social Security benefits are automatically adjusted every year. The Social Security Administration uses a certain measurement of inflation to determine if benefits should be increased or not.

The measurement they currently use is the CPI-W, which stands for the Consumer Price Index for Urban Wage Earners and Clerical Workers. This inflation gauge is compiled and published by the Bureau of Labor Statistics.

Although they release this on a monthly basis, the Social Security Administration (SSA) only uses the data for the third quarter when making the adjustment to Social Security benefits. That means they look at the data for July, August, and September each year.

To determine a potential increase in Social Security benefits to match an increased cost of living, the SSA adds the sum of the index for the prior years third quarter and compares it to the sum of the third quarter index for the current year. If the difference between the two numbers is positive, Social Security benefits increase. If there is no increase in the CPI-W, then there is no cost of living adjustment for the year.

ItҒs really pretty simple but some folks believe itŒs not very effective.

Theres an argument against this way of determining cost of living adjustments for Social Security benefits.

Some say the CPI-W measurement method may not be the best because retirees spend their money very differently than individuals who are not retired. Retirees tend to spend more on healthcare and housing, and less on gasoline, education, and consumer electronics.

As a fix for this, it has been widely suggested that the Social Security Administration should discontinue basing the annual cost of living adjustments on the CPI-W and instead start using a measurement known as the CPI-E.

Considering Costs Specific to Retirees: The CPI-E Proposal

This version of the CPI is meant to track the expenses specifically for Americans who are 62 years of age or older. While both of these indexes measure the same categories of goods and services, they have different weightings to the categories.

So for example, the CPI-E factors in around 11% of its index to healthcare cost. The CPI-W, however, only counts 5.6% of the overall index as healthcare expenses. Since statistically, seniors spend more of their money on healthcare, an index that assigns a higher weighting should be more accurate to the way they spend money and experience inflation.

There are some other differences in weightings between the CPI-W and the CPI-E that may be significant for determining cost of living adjustments for Social Security benefits. In total, each index measures 8 main categories:

· Housing

· Transportation

· Food and beverages

· Medical care

· Recreation

· Education and communication

· Apparel

· Other goods and services (for the stuff that doesnt fit anywhere else)

As you can see from this chart the two big differences are the weightings assigned to housing expense and medical care:

image: cpiw cpi-e weighing scales

The big question here is, how does this affect the actual cost of living adjustment for benefits? Would it result in a larger benefit increase for seniors?

Using the CPI-E data available from December 1982, we can go back and do a year-by-year comparison with the CPI-W, the version thats currently being used.

When viewed side by side, you can see that there are some years where the CPI-W was ahead, those are the red bars, but in most years the CPI-E was slightly higher.

image: cpi-w cpi-e compared

If you average the difference between the two measurements since 1984, the CPI-E has been about 0.2% higher per year. So yes, in most years the CPI-E would yield a higher cost of living adjustment than the CPI-W, but there are some years (like the COLA announced for 2022) where the CPI-W was higher than the CPI-E.

The CPI-E Is Not A Magic Formula

This highlights the reluctuance of legislators to make this switch. On paper, it sounds good. An index that more accurately represent the expense of retirees should work better. But no politician wants to be responsible for making this switch in a year where the new method results in worse results.

Additionally, there are a few problems with the measurement method. First, the Bureau of Labor Statistics is very blunt about this being an “experimental” index. The Government Accountability Office also released a report this year that identified several issues with the potential accuracy of the CPI, and specifically mentioned the small sample size of the CPI-E as a factor.

The CPI-E sounds great to many folks who receive Social Security benefits and feel like their costs go up more than their Social Security income does. But ultimately, there is no magic formula that works well enough to keep everyone happy.

I know that with the current fiscal challenges that the Social Security system is facing, I wouldn’t expect a more generous formula for increasing benefits. But as this conversation continues to develop, I’ll keep you informed right here.

If you still have questions, you could leave a comment below, but what may be an even greater help is to join my FREE FACEBOOK MEMBERS GROUP. It’s very active and has some really smart people who love to answer any questions you may have about Social Security. From time to time Ill even drop in to add my thoughts, too.

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Five things to know about todays Social Security COLA

By Tobias Burns
The Hill
October 13, 2022

Social Security payments will increase by an average of $140 per check as the national pension plan is set to receive its biggest cost-of-living adjustment (COLA) in 40 years.

The hike came in at 8.7 percent, an attempt to close the gap caused by inflation that reached as high as 9.1 percent in June before tapering off slightly over the summer. Between 2010 and 2020, Social Security COLAs averaged just 1.7 percent.

Social Security is adjusted in the third fiscal quarter every year and is the primary source of income for most of AmericaҒs seniors, according to the agency. In June, nearly 50 million retired workers and their families received more than $80 billion, with the average monthly benefit totaling $1,670.

Many disabled workers are also supported by Social Security. In June, they received more than $10 billion for an average payment of $1,362.

In total, the program pays out more than a trillion dollars each year from a dedicated payroll tax, making up 17 percent of the national budget in 2021, according to the Treasury Department.

More than 70 million Social Security beneficiaries will be affected by the adjustment, which will go into effect over December and January.

Here are five takeaways from Thursdays COLA.

The COLA allows recipients to break even

While an additional $140 per month is a sizable increase for people who receive a Social Security check, the extra money is really just a break-even number to offset the cost of high inflation.

The consumer price index report released Thursday showed annual inflation increased 8.2 percent, remaining near 40-year highs and showing little sign of slowing down.

While energy prices slackened by 2.1 percent in September, theyҒre still 19.8 percent higher than they were last year. Prices for food are also continuing to increase, up 0.8 percent on the month and 11.2 percent on the year.

Consumer inflation has been above 8 percent since March, eating into paychecks and diminishing the value of Social Security payments. So while the 8.7 percent COLA will come as a relief to seniors, it will only normalize their standard of living back to where it was a year ago rather than giving them surplus income.

“This is not a benefit increase, its an adjustment to keep pace with inflation, and of course prices are rising to very high levels right now,Ҕ Nancy Altman, a Social Security advocate and co-director of the nonprofit organization Social Security Works, said in an interview. But the COLA is an extremely important feature, because without it benefits would erode over time.”

The COLA is especially important amid stock market declines

Many seniors receive benefits from private pension plans such as 401(k)s that are widely invested across the stock market in addition to Social Security.

The stock market has been performing poorly lately due to interest rate hikes by the Federal Reserve that are intended to cool inflation, so the performance of many broad-based investment vehicles has been diminishing. 

This makes the COLA, which is a monetary modification thats independent of market performance, especially powerful by comparison.

|The whole concept of a COLA is a big deal,| Altman said. “It often gets ignored because theres normally just a small cost-of-living increase, or sometimes there’s none. But if inflation goes up 20 percent, you get a 20 percent increase. It’s not capped, and that’s an important concept, especially now”

Since the Fed started raising interest rates back in March, the big stock indices have seen major declines, falling more than 20 percent into bear market territory and taking many retirement plans with them.

The Dow Jones Industrial Average is down 7,781 points, 21.51 percent, since the beginning of the year. The S&P 500 is down 26.62 percent and the technology-heavy Nasdaq index, whose companies tend to carry a lot of debt and so are particularly susceptible to interest rate hikes, has fallen more than 35.43 percent.

Medicare premiums are decreasing

ThursdayԒs COLA announcement follows a drop in the price of the premium for Medicare Part B, which covers hospital and doctor visits another boon for seniors, though a smaller one.

In September, Medicare determined that the Part B premium would be 3 percent lower in 2023, dropping to $164.90 from $170.10 in 2022. Those payments are usually taken directly out of Social Security checks, so that could mean an additional $5 dollars a month on average for seniors on top of the $140 COLA boost.

Part B deductibles will also drop to $226 in 2023, a decrease of $7 from the annual deductible of $233 in 2022.

These changes are especially significant for people who don’t have much income, since their Social Security payments can often be eaten up by their Medicare premiums as part of the same effective payment.

But the rising COLA together with the falling premium means that people on the lower end of the income spectrum could feel a significant increase in monthly payments beginning in 2023.

The COLA will help more people than just retirees

Millions of children in the U.S. with retired or deceased parents also receive Social Security benefits each month.

דEach month during 2021, we paid an average of $2.8 billion in benefits to 4 million children whose parents (one or both) were retired, deceased, or were disabled, the Social Security Administration said in a statement back in June.

And that number excludes children who are taken care of by grandparents receiving Social Security benefits. As many as 2.5 million grandparents in the U.S. have the primary responsibility of caring for grandchildren, according to research from North Dakota State University.

“Economic hardship in the U.S. and recent social challenges have contributed to the increase in multiple-family generations living together to save costs and share resources,” a 2021 report from the university found.

Grandparents living in multigenerational homes are “quite common” and are often “providing help with financial difficulties and working to provide basic needs and save economic resources,” the report found.

Congress considering inflation measurement specifically for seniors

The COLA is based on a measure of inflation called the CPI-W, which measures the spending habits of urban wage earners and clerical workers. Accordingly, experts refer to the COLA as wage-indexed.

The Labor Department also measures the spending habits of seniors in a metric known as the CPI-E - EӔ for elderly - but the Social Security Administration doesn"t use that number to figure out by how much it should adjust its checks.

Congress would need to authorize the use of the CPI-E for the COLA, which could affect how much seniors pay on important expenses like prescription drugs.

Rep. John Larson (D-Conn.) has one such proposal, which he says |would help seniors who spend a greater portion of their income on health care and other necessities.”

In a Thursday statement released along with the COLA, Larson touted his legislation, encouraging the “new measure of inflation that takes into account actual expenses incurred by seniors.”

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Sunday, March 27, 2022

UK living standards to fall at fastest rate since mid-1950s

image: middle class squeeze

UK living standards to fall at fastest rate since mid-1950s

“Like US, UK economy very bad shape: inflation outruns wages, workers’ living standards drop fast and far, Brexit’s disastrous results, a botched Covid response, etc. Some major UK papers, politicians say so. Not US where Biden’s media chorus says ‘great economic recovery.’
- Richard Wolff

By Richard Partington
The Guardian
March 23, 3022

Living standards in Britain are expected to fall at the fastest annual rate since the mid-1950s and will take until at least 2024 to return to pre-Covid levels, according to the governments independent economic forecaster.

Despite the measures announced by Rishi Sunak at his spring statement, the OFFICE FOR BUDGET RESPONSIBILITY (OBR) said real household disposable incomes per person would fall by 2.2% in 2022-23 as earnings from work fail to keep pace with soaring inflation.

It said the fall would be the biggest in a single financial year since modern records began in 1956-57, and that it would take until 2024-25 for inflation-adjusted living standards to return to their pre-pandemic level.

Highlighting an unprecedented squeeze on households as inflation soared after the Covid pandemic, made worse by the further rise in global energy prices after Russia’s invasion of Ukraine, the OBR said the damage for families would mean lower levels of consumer spending in the UK economy.

With households expected to tighten their belts as wage growth fails to match high rates of inflation, the tax and spending watchdog issued a sharp growth downgrade for this year to 3.8%, down from a previous estimate for growth of 6%.

Inflation is forecast to peak at 9% later this year, its highest rate in four decades, the OBR said. The figure was calculated a week after the Russian invasion of Ukraine - meaning the estimate takes into account the large increases in global energy prices triggered by the conflict and retaliatory sanctions.

Oil and gas prices have fallen back on international markets in recent days amid hopes for a breakthrough in peace talks, although they remain at historically high levels.

In his update to the Commons, Sunak said he would ‘stand by’ households by launching an immediate cut in fuel duty and raising the threshold at which workers begin to pay national insurance contributions.

With households expected to tighten their belts as wage growth fails to match high rates of inflation, the tax and spending watchdog issued a sharp growth downgrade for this year to 3.8%, down from a previous estimate for growth of 6%.

Inflation is forecast to peak at 9% later this year, its highest rate in four decades, the OBR said. The figure was calculated a week after the Russian invasion of Ukraine - meaning the estimate takes into account the large increases in global energy prices triggered by the conflict and retaliatory sanctions.

Oil and gas prices have fallen back on international markets in recent days amid hopes for a breakthrough in peace talks, although they remain at historically high levels.

However, the OBR said the support measures worth a combined L17.6bn - would only cushion about a third of the hit to living standards, while the chancellors tax cuts would only undo about one-sixth of the total tax increases he had previously announced.

Despite a stronger than expected performance in the public finances over recent months, analysts suggested Sunak had banked much of the gains for future, potentially for a pre-election giveaway.

Government borrowing in the current financial year would come in about L55.2bn lower than it estimated in October, the OBR said, suggesting Sunak would still have about L30bn of headroom within his self-imposed tax and spending limits.

However, it warned borrowing was expected to rise next year as high inflation pushes up the cost of servicing the UKҒs national debt to L83bn, double its previous estimate and the highest level on record.

Although Sunak sought to position himself to the nation as a tax-cutting chancellor by promising a 1p reduction in income tax from 2024, the OBR said that other changes would more than offset the giveaway by lifting the UK tax burden to the highest level since the 1940s.

The watchdog warned the inflation risk from Ukraine meant there was a high degree of uncertainty about its forecasts.

However, it suggested the squeeze on living standards would ease in future as global energy prices eventually drop back.

“Although low rates of unemployment after the end of furlough are likely to persist as companies struggle to find workers p fuelling growth in wages this year of about 5.3% - a wage-price spiral was unlikely to take hold,” the OBR said, “with inflation forecast to fall back below 2% in late 2023.”

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Wednesday, September 02, 2020

The Bradykinin Hypothesis

image: coronavirus

A Supercomputer Analyzed Covid-19 and an Interesting New Theory Has Emerged
A closer look at the Bradykinin hypothesis

By Thomas Smith
Elemental
September 1, 2020

arlier this summer, the Summit supercomputer at Oak Ridge National Lab in Tennessee set about CRUNCHING DATA on more than 40,000 genes from 17,000 genetic samples in an effort to better understand COVID-19. Summit is the SECOND-FASTEST computer in the world, but the process which involved analyzing 2.5 billion genetic combinations - still took more than a week.

When Summit was done, researchers analyzed the results. It was, in the words of Dr. Daniel Jacobson, lead researcher and chief scientist for computational systems biology at Oak Ridge, a ”EUREKA MOMENT.” The computer had revealed a new theory about how Covid-19 impacts the body: THE BRADYKINKIN HYPOTHESIS. The hypothesis provides a model that explains many aspects of Covid-19, including some of its most BIZARRE SYSPTOMS. It also suggests 10-plus potential treatments, many of which are already FDA approved. Jacobsons group PUBLISHED THEIR RESULTS in a paper in the journal eLife in early July.

According to the team’s findings, a Covid-19 infection generally begins when the virus enters the body through ACE2 receptors in the nose, (The receptors, which the virus IS KNOWS TO TARGET, are abundant there.) The virus then proceeds through the body, entering cells in other places where ACE2 is also present: the intestines, kidneys, and heart. This likely accounts for at least some of the diseases cardiac and GI symptoms.

But once Covid-19 has established itself in the body, things start to get really interesting. According to Jacobson’s group, the data Summit analyzed shows that Covid-19 isn’t content to simply infect cells that already express lots of ACE2 receptors. Instead, it actively hijacks the bodyҒs own systems, tricking it into upregulating ACE2 receptors in places where they’re usually expressed at LOW OR MEDIUM LEVELS, including the lungs.

In this sense, Covid-19 is like a burglar who slips in your unlocked second-floor windowand starts to ransack your house. Once inside, though, they donҒt just take your stuff they also throw open all your doors and windows so their accomplices can rush in and help pillage more efficiently.

The renin-angiotensin system (RAS) controls many aspects of the circulatory system, including the body’s levels of a chemical called bradykinin, which normally helps to regulate blood pressure. According to the team’s analysis, when the virus tweaks the RAS, it causes the body’s mechanisms for regulating bradykinin to go haywire. Bradykinin receptors are resensitized, and the body also stops effectively breaking down bradykinin. (ACE normally degrades bradykinin, but when the virus downregulates it, it can’t do this as effectively.)

The end result, the researchers say, is to release a bradykinin storm a massive, runaway buildup of bradykinin in the body. According to the bradykinin hypothesis, it’s this storm that is ultimately responsible for many of Covid-19s deadly effects. Jacobson’s team says in their paper that the pathology of Covid-19 is likely the result of “Bradykinin Storms rather than cytokine storms,” which HAD BEEN PREVIOUSLY IDENTIFIED in Covid-19 patients, but that the two may be intricately linked. OTHER PAPERS had previously identified bradykinin storms as a possible cause of Covid-19s pathologies.

As bradykinin builds up in the body, it dramatically increases vascular permeability. In short, it makes your blood vessels leaky. This aligns with recent clinical data, WHICH INCREASINGLY VIEWS COVID-19 PRIMARILY AS A VASCULAR DISEASE, rather than a respiratory one. But Covid-19 still has a massive effect on the lungs. As blood vessels start to leak due to a bradykinin storm, the researchers say, the lungs can fill with fluid. Immune cells also leak out into the lungs, Jacobson’s team found, causing inflammation.

And Covid-19 has another especially insidious trick. Through another pathway, the teams data shows, it increases production of hyaluronic acid (HLA) in the lungs. HLA is OFTEN USED IN SOAPS AND LOTIONS for its ability to absorb more than 1,000 times its weight in fluid. When it combines with fluid leaking into the lungs, the results are disastrous: It forms a hydrogel, which can FILL THE LUNGS IN SOME PATIENTS. According to Jacobson, once this happens, “its like TRYING TO BREATHE THROUGH JELL-O.”

This may explain why ventilators PROVEN LESS EFFECTIVE in treating advanced Covid-19 than doctors originally expected, based on experiences with other viruses. It reaches a point where regardless of how much oxygen you pump in, it doesn’t matter, because the alveoli in the lungs are filled with this hydrogel, Jacobson says. “The lungs become like a water balloon. Patients can suffocate even while receiving full breathing support.”

The bradykinin hypothesis also extends to many of Covid-19’s effects on the heart. About ONE IN FIVE HOSPITALIZED COVID-19 PATIENTS have damage to their hearts, even if they never had cardiac issues before. Some of this is likely due to the virus infecting the heart directly through its ACE2 receptors. But the RAS also controls aspects of cardiac contractions and blood pressure. According to the researchers, bradykinin storms could create arrhythmias and low blood pressure, which are often seen in Covid-19 patients.

The bradykinin hypothesis also accounts for COVID-19’S NEUROLOGICAL EFFECTS, which are some of the most surprising and concerning elements of the disease. THESE SYMPTOMS (which include dizziness, seizures, delirium, and stroke) are present in AS MANY AS HALF OF HOSPITALIZED COVID-19 PATIENTS. According to Jacobson and his team, MRI studies in France revealed that many Covid-19 patients have evidence of leaky blood vessels in their brains.

Bradykinin - especially at high doses - can also lead to a ;." rel="nofollow"]BREAKDOWN OF THE BLOOD-BRAIN BARRIER. Under normal circumstances, this barrier acts as a filter between your brain and the rest of your circulatory system. It lets in the nutrients and small molecules that the brain needs to function, while keeping out toxins and pathogens and keeping the brain’s internal environment tightly regulated.

If bradykinin storms cause the blood-brain barrier to break down, this could allow harmful cells and compounds into the brain, leading to inflammation, potential brain damage, and many of the neurological symptoms Covid-19 patients experience. Jacobson told me, “It is a reasonable hypothesis that many of the neurological symptoms in Covid-19 could be due to an excess of bradykinin. It has been reported that bradykinin would indeed be likely to increase the permeability of the blood-brain barrier. In addition, similar neurological symptoms have been observed in other diseases that result from an excess of bradykinin.”

Increased bradykinin levels could also account for other common Covid-19 symptoms. ACE inhibitors - a class of drugs USED TO TREAT HIGH BLOOD PRESSURE - have a similar effect on the RAS system as Covid-19, INCREASING BRADYKINKIN LEVELS. In fact, Jacobson and his team note in their paper that “the virus - acts pharmacologically as an ACE inhibitor… almost directly mirroring the actions of these drugs.

By acting like a natural ACE inhibitor, Covid-19 MAY BE CAUSING the same effects that hypertensive patients sometimes get when they take blood pressure lowering drugs. ACE inhibitors are known to CAUSE a dry cough and fatigue, two textbook symptoms of Covid-19. And they can potentially increase blood potassium levels, which has also been OBSERVED IN COVID_19 PATIENTS. The similarities between ACE inhibitor side effects and Covid-19 symptoms strengthen the bradykinin hypothesis, the researchers say.

ACE inhibitors are also known to cause a LOSS OF TASTE AND SMELL. Jacobson stresses, though, that this symptom is more likely due to the virus “affecting the cells surrounding olfactory nerve cells than the direct effects of bradykinin.”

Though still an emerging theory, the bradykinin hypothesis explains several other of Covid-19;s seemingly bizarre symptoms. Jacobson and his team speculate that leaky vasculature caused by bradykinin storms could be responsible for COVID-TOES, a condition involving swollen, bruised toes that some Covid-19 patients experience. Bradykinin can also MESS WITH THE THYROID GLAND, which could produce the THYROID SYMPTOMS recently observed in some patients.

The bradykinin hypothesis could also explain some of the broader demographic patterns of the diseases spread. The researchers note that some aspects of the RAS system are sex-linked, with proteins for several receptors (such as one called TMSB4X) located on the X chromosome. This means that “women would have twice the levels of this protein than men,” a result borne out by the researchers data. In their paper, Jacobson’s team concludes that this could explain the lower incidence of Covid-19 induced mortality in women.Ғ A genetic quirk of the RAS could be GIVING WOMEN EXTRA PROTECTION against the disease.

The bradykinin hypothesis provides a model that contributes to “a better understanding of Covid-19” and “adds novelty to the existing literature,” according to scientists Frank van de Veerdonk, Jos WM van der Meer, and Roger Little, who PEER-REVIEWED THE TEAMS’ PAPER. It predicts nearly all the disease’s symptoms, even ones (like bruises on the toes) that at first appear random, and further suggests new treatments for the disease.

As Jacobson and team point out, several drugs target aspects of the RAS and are already FDA approved to treat other conditions. They could arguably be applied to treating Covid-19 as well. Several, like danazol, stanozolol, and ecallantide, reduce bradykinin production and could potentially stop a deadly bradykinin storm. Others, like icatibant, reduce bradykinin signaling and could blunt its effects once its already in the body.

Interestingly, Jacobson’s team also suggests VITAMIN D as a potentially useful Covid-19 drug. The vitamin is involved in the RAS system and could prove helpful by reducing levels of another compound, known as REN. Again, this could stop potentially deadly bradykinin storms from forming. The researchers note that vitamin D has already BEEM SHOWN TO HELP THOSE WITH COVID-19. The vitamin is readily available over the counter, and AROUND 20% OF THE POPULATION IS DEFICIENT. If indeed the vitamin proves effective at reducing the severity of bradykinin storms, it could be an easy, relatively safe way to reduce the severity of the virus.

Other compounds could treat symptoms associated with bradykinin storms. Hymecromone, for example, could reduce hyaluronic acid levels, potentially stopping deadly hydrogels from forming in the lungs. And timbetasin could mimic the mechanism that the researchers believe protects women from more severe Covid-19 infections. All of these potential treatments are speculative, of course, and would need to be studied in a rigorous, controlled environment before their effectiveness could be determined and they could be used more broadly.

Covid-19 stands out for both the scale of its global impact and the apparent randomness of ITS MANY SYMPTONS. Physicians have STRUGGLES TO UNDERSTAND the disease and come up with a unified theory for how it works. Though as of yet unproven, the bradykinin hypothesis provides such a theory. And like all good hypotheses, it also provides specific, testable predictions in this case, actual drugs that could provide relief to real patients.

The researchers are quick to point out that the testing of any of these pharmaceutical interventions should be done in well-designed clinical trials. As to the next step in the process, Jacobson is clear: “We have to get this message out.” His team’s finding wont cure Covid-19. But if the treatments it points to pan out in the clinic, interventions guided by the bradykinin hypothesis could greatly reduce patients’ suffering and potentially save lives.

SOURCE

Posted by Elvis on 09/02/20 •
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