U.S. debt to reach 100% of GDP in 2021
03 September 2020
The federal budget deficit will reach $3.3 trillion in the fiscal year ending this month — more than triple the 2019 shortfall, the nonpartisan Congressional Budget Office (CBO) projected on Wednesday.
Why it matters: That would be 16% of GDP, the largest amount since the end of World War II in 1945. The national debt is projected to exceed 100% of GDP in 2021 and rise to 107% in 2023 — "the highest in the nation's history," the CBO notes.
Driving the news: The CBO attributed the rise mostly to the economic disruption caused by the coronavirus pandemic "and the enactment of legislation in response."
- Federal spending has jumped to to 32% of GDP this fiscal year after Congress spent trillions of dollars in coronavirus relief in order to curb the spread of a virus that has so far killed over 185,700 people and infected more than 6.1 million in the U.S.
- Negotiations for the next stimulus package have continued to stall, as tens of thousands of Americans remain without a job.
Our thought bubble, via Axios' Felix Salmon: The U.S. government can borrow at less than the rate of inflation, which is a sign from the markets that they’re encouraging higher government spending, higher borrowing and higher debt.
- The Treasury will always be able to repay that debt, because it borrows in dollars and can print as many of those as it likes.
Of note: The deficit could have been worse. The CBO projected in April that it would jump to $3.7 trillion.
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.