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U.S. federal deficit soars to record $3.1 trillion in 2020

The U.S. budget deficit hit a record $3.1 trillion in the 2020 fiscal year, according to data released Friday by the Treasury Department.

Why it matters: The deficit — which measures the gap between what the government spends and what it brings in through taxes and other revenue streams — illustrates the massive impact the coronavirus pandemic has had on the economy.


  • The shortfall easily eclipsed the previous record set in 2009, when the deficit was $1.4 trillion, per CNBC.

By the numbers:

  • The federal government spent $6.552 trillion for the fiscal year ending on Sept. 30, according government data. That's up from $4.447 trillion spent last fiscal year.
  • The government brought in $3.42 trillion in tax revenue in the 2020 fiscal year, down slightly from 2019.
  • Much of the 2020 deficit can be attributed to the $2.2 trillion CARES Act, passed in March.

What they're saying: In a statement on Friday, Treasury said the deficit was $2 trillion more than originally forecast due to actions taken to stem the economic impact of the coronavirus.

  • “Thanks to President Trump’s pro-growth policies and the bipartisan CARES Act, we are experiencing a strong economic recovery,” Treasury Secretary Steven Mnuchin said Friday. 
  • “The Administration remains fully committed to supporting American workers, families, and businesses and to ensuring that our robust economic rebound continues,” Mnuchin said.

The big picture: The data come as House Speaker Nancy Pelosi and the White House remain deadlocked in negotiations on a new round of stimulus aid.

  • Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday said he would not put a potential $1.8 trillion deal struck by democrats and the Trump administration on the Senate floor, noting the number is “a much larger amount than I can sell to my members."

Go deeper: Employment gains are reversing course

Apple sets September quarter sales record despite pandemic

Apple on Thursday reported quarterly sales and earnings that narrowly exceeded analysts estimates as the iPhone maker continued to see strong demand amid the COVID-19 pandemic.

What they's saying: The company said response to new products, including the iPhone 12 has been "tremendously positive" but did not give a specific forecast for the current quarter.

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Podcast: The vaccine race turns toward nationalism

The coronavirus pandemic is worsening, both in the U.S. and abroad, with cases, hospitalizations and deaths all rising.

Axios Re:Cap digs into the state of global vaccine development — including why the U.S. and China seem to going at it alone — with medicinal chemist and biotech blogger Derek Lowe.

How central banks can save the world

The trillion-dollar gap between actual GDP and potential GDP is a gap made up of misery, unemployment, and unfulfilled promise. It's also a gap that can be eradicated — if central banks embrace unconventional monetary policy.

  • That's the message from Eric Lonergan and Megan Greene, two economists who reject the idea that central banks have hit a "lower bound" on interest rates. In fact, they reject the idea that "interest rates" are a singular thing at all, and they fullthroatedly reject the idea — most recently put forward by New York Fed president Bill Dudley — that the Fed is "out of firepower."

Why it matters: If Lonergan and Greene are right, then central banks have effectively unlimited ammunition in their fight to increase inflation and employment. They are limited only by political will.

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Leon Black says he "made a terrible mistake" doing business with Jeffrey Epstein

Apollo Global Management CEO Leon Black on Wednesday said during an earnings call that he made a "terrible mistake" by employing Jeffrey Epstein to work on personal financial and philanthropic services.

Why it matters: Apollo is one of the world's largest private equity firms, and already has lost at least one major client over Black's involvement with Epstein.

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Jeremy Corbyn suspended by U.K. Labour Party over anti-Semitism report

The U.K. Labour Party has suspended its former leader, Jeremy Corbyn, after a watchdog report found that the party failed to properly take action against allegations of anti-Semitism during his time in charge.

Why it matters: It represents a strong break by Keir Starmer, Labour's current leader, from the Corbyn era and one of the party's most persistent scandals.

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U.S. economy sees record growth in third quarter

The U.S. economy grew at a 33.1% annualized pace in the third quarter, the Commerce Department said on Thursday.

The state of play: The record growth follows easing of the coronavirus-driven lockdowns that pushed the economy to the worst-ever contraction — but GDP still remains well below its pre-pandemic level.

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Investors have nowhere to hide

The massive losses in oil prices and U.S. and European equities were not countered by gains in traditional safe-haven assets on Wednesday.

Why it matters: The unusual movement in typical hedging tools like bonds, precious metals and currencies means they are not providing investors an asset that will appreciate in the event of a major equity selloff.

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Sports owners have put $46 million toward federal political donations since 2015

Data: ESPN/FiveThirtyEight; Chart: Axios Visuals

Sports team owners in the four largest North American leagues (NFL, NBA, MLB, NHL) have donated over $46 million in federal elections since 2015, according to research conducted by ESPN and FiveThirtyEight.

By the numbers: Over the past three elections, $35.7 million of that money (77.4%) has gone to Republican campaigns and super PACs, compared to $10.4 million (22.6%) to Democrats.

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