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U.S. debt to reach 100% of GDP in 2021

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."

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.

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Biden vacancies delay Big Tech reckoning

Data: Axios research; Table: Axios Visuals

President Biden still hasn't named permanent leaders at the key agencies overseeing the tech and telecom industries, giving him a late start on confronting powerful U.S. companies.

Why it matters: If Biden doesn't move quickly, there won't be enough time left for his administration to take on big targets and tackle thorny policy problems.

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AT&T in talks with Discovery to combine media assets

AT&T is in talks with media giant Discovery about merging its media assets, like CNN, TBS and TNT, according to two sources familiar with the discussions.

Why it matters: A potential merger could allow AT&T and Discovery to better compete with entertainment giants like Disney and Netflix in the video streaming wars.

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Tesla manages $104 million profit in Q2 despite virus shutdown

Tesla earned $104 million net profit during the second quarter, despite the coronavirus-related shutdown of its main factory in Fremont, Calif., sending its shares up 6% in after-hours trading.

Why it matters: It was Tesla's fourth quarterly profit in a row, clearing a hurdle to be included in the the S&P 500 stock index of the largest U.S. companies and signaling a new phase of maturity for the electric carmaker.

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