Social insecurity

Social Security won't be able to pay full benefits by 2035 & the self-checkout experience may be coming to an end

Good morning readers. How are much are you willing to pay for a gym membership? $40? $50? $100 per month? Equinox, the high-end fitness chain, seems to think $40,000 is about right. The company’s latest offering, "Optimize by Equinox," promises not just fitness but a fountain of youth—for a hefty price tag no less. And it looks like members get the royal treatment: from top trainers to nutritionists, sleep coaches, and massages. It's a Formula One approach to longevity.

What do you think? Would you ever drop $40K on a gym membership? The Fit-for-Less $10/month membership is more my style.

Let’s jump into today’s storylines.

In today’s digest:

  • Social Security and Medicare are facing a crisis

  • Headline Hustle: Israel launches strikes on southernmost city of Rafah, the largest physician-owned healthcare network in the US files for bankruptcy, Boeing launches two astronauts in space for first time

  • Are self-checkout machines coming to an end?

  • Pulse Points: What’s Trending

POLITICS

Is Social Security heading for a meltdown?

Source: CJ Burton / Getty Images

Are we inching closer to a Social Security and Medicare crisis? That’s the grim forecast from the programs’ trustees, who suggest these pillars of the American safety net could crumble within the next decade if lawmakers don’t act.

According to a recent report, the combined Social Security trust funds that support millions of elderly, disabled, and survivors may be exhausted by 2035, potentially leaving beneficiaries with only 83% of their expected payments. Medicare, meanwhile, might hold on until 2036 before scaling back hospital benefits to just 89% of the promised payout.

The need to act fast

Politicians from both sides have vowed to defend these cherished programs, but the political banter remains. President Biden and former President Trump both champion Social Security and Medicare, but with differing approaches. While Biden suggests increasing taxes on wealthier Americans and channeling savings from drug reforms into Medicare, Trump has yet to offer a detailed fix for either program.

With the population aging and healthcare costs soaring, these programs are facing increased strain. Social Security (for example) is a lifeline for many, making up 30% of retirees’ income.

So what’s the outlook?

  • The trustees suggest improved productivity and lower disability benefit incidence could help Social Security’s finances.

  • Still, the overall situation is fragile. Medicare’s slight improvement stems from higher payroll tax income and a few strategic changes.

The waiting game. Despite these insights, Congress seems hesitant to tackle the issue head-on. Ideas like raising the retirement age and taxing higher incomes have floated around, but political will remains tepid at best. In the meantime, the deficit grows. Social Security and Medicare are expected to double their expenditure by 2034, with spending surging from $1.3 trillion to $2.5 trillion.

But all is not lost. As long as people pay into the system, Social Security and Medicare will continue in some form. Reform might just need to happen sooner rather than later.

The ball’s in Congress’s court. The future of Social Security and Medicare is more than a policy issue—it’s about the lives of millions of Americans who depend on these programs. Let’s hope the timekeepers in Congress can find a timely solution.

IN THE KNOW

Headline Hustle

Source: Reuters

🇮🇱 Israel launches strikes on the southernmost city of Rafah. The Israeli military conducted strikes in Rafah, aiming to pressure Hamas for hostage releases, despite a cease-fire proposal by Hamas that Israel finds insufficient. The operation contradicts U.S. advisories and could endanger over a million civilians. Amidst these tensions, the U.S. has paused weapon shipments to Israel and is reviewing the proposed cease-fire that suggests a prisoner swap and a permanent cessation of hostilities in Gaza. Negotiations continue with involvement from U.S., Egypt, and Qatar.

🏥 Steward Health, nation’s largest physician-owned hospital operator, files for bankruptcy. Steward Health Care, the largest private physician-owned healthcare network in the U.S., has filed for Chapter 11 bankruptcy in Texas. Amidst financial strain, including a controversial real estate deal that increased its operational costs, Steward aims to secure up to $300 million in financing to maintain operations. The bankruptcy has drawn scrutiny from Massachusetts officials, who are concerned about its impact on patient care and the management's financial decisions. Steward asserts that patient services will continue unaffected as it navigates these financial challenges.

🚀 Boeing will launch two NASA astronauts into space for the first time. After significant delays and technical issues, Boeing is set to launch its first crewed Starliner spacecraft to the International Space Station. The launch, involving astronauts Barry "Butch" Wilmore and Sunita Williams, marks a critical test for Boeing's entry into NASA's commercial spaceflight roster alongside SpaceX. Scheduled for liftoff Monday night, this mission is vital for Boeing to demonstrate its capability in reliable space travel, following previous setbacks with both the Starliner and its aviation division.

RETAIL

How retailers are reshaping the self-checkout experience

Source: UCG / Getty Images

In the retail world, self-checkouts are getting a makeover, not for style but for strategy. It seems our quick dash through the self-checkout lanes might be taking a detour, with retailers like Target and Dollar General tweaking the self-service experience to address the sticky issue of shrinkage—retail speak for losses due to theft or errors.

Strategic shifts in self-service

Originally, self-checkouts were a beacon of efficiency—perfect for small baskets and quick exits. But as stores noticed an uptick in shrink and bottlenecks, some are pumping the brakes on the self-service free-for-all.

  • Target, for instance, has capped the number of items to ten at self-checkouts, a move that has halved checkout times in some tests and helped keep inventory from disappearing too mysteriously.

  • On the flip side, Walmart is rethinking its approach by pulling self-checkouts from select locations based on feedback that it complicates shopping more than it simplifies it.

These retailers aren’t just switching machines off; they’re swapping them for more human interactions, hoping a personal touch might secure both products and customer satisfaction.

The saga continues. With theft becoming more "open and brazen," as the National Retail Federation points out, and about 20% of shoppers admitting to unintentional five-finger discounts via self-service, retailers are in a tough spot. They introduced self-checkouts to cut costs on labor, but the unintended checkout "discounts" are forcing a rethink.

Looking ahead…with each adjustment, stores are learning that managing self-checkouts is less about counting items and more about measuring customer experience and trust.

SNIPPETS

Pulse Points

  • Microsoft is developing a new large-scale AI language model, MAI-1, which could rival top models from Google, Anthropic, and OpenAI, marking its first major in-house AI venture since its $10 billion investment in OpenAI, according to The Information.

  • The Federal Aviation Administration has launched an investigation into the Boeing 787 Dreamliner following Boeing's admission that some employees falsely claimed to have completed certain tests.

  • Tesla's intense layoffs have continued into their fourth week, with more employees announcing their termination on LinkedIn and other platforms.

  • Apple’s “Let Loose” event is happening today at 7 a.m. PT/10 a.m. ET. Here’s what you can expect.

  • Autonomous driving startup, Wayve, raises $1B to take its Tesla-like technology for self-driving to many carmakers.

  • Noelia Voigt, crowned Miss USA in November 2023, has announced her resignation from the role, citing mental health considerations.

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