Mark Kelly of Recorded Future, a cyber-security firm, says his company is aware of about 50 hacking groups in China, including private firms working for the mss or People’s Liberation Army. There are undoubtedly many more. Mr Kelly describes China’s cyber-espionage efforts as “orders of magnitude” greater in scale than those mounted by Russia or North Korea.

As the indictment shows, they are surprisingly devolved. Some of them specialise in spying on different parts of the world, says Nigel Inkster, a former deputy head of Britain’s spy agency, mi6. They have considerable leeway to do as they wish, he says: “I’m not even sure that there is any kind of formal political clearance mechanism.” Much of their work is subcontracted to private firms. Last month a huge online dump of documents from one such company, i-Soon, showed its involvement in large-scale cyber-snooping on behalf of a variety of government agencies.

The West’s anxieties, not least about the hackers’ theft of corporate data, are becoming increasingly manifest. In January the head of the fbi, Christopher Wray, said that China’s state-sponsored hackers outnumbered his agency’s cyber-personnel by “at least 50 to one”. He added that China’s hackers are laying the groundwork for a possible Chinese strike, “positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities.”

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The West’s anxieties about Chinese cyber-espionage are becoming increasingly manifest. But if it hopes that naming, shaming and sanctions will dissuade the spooks, it is likely to be disappointed https://t.co/MnQGij3lds 👇

— The Economist (@TheEconomist) March 27, 2024

The US faces a Liz Truss-style market shock if the government ignores the country’s ballooning federal debt, the head of Congress’s independent fiscal watchdog has warned.

Phillip Swagel, director of the Congressional Budget Office, said the mounting US fiscal burden was on an “unprecedented” trajectory, risking a crisis of the kind that sparked a run on the pound and the collapse of Truss’s government in the UK in 2022.

“The danger, of course, is what the UK faced with former prime minister Truss, where policymakers tried to take an action, and then there’s a market reaction to that action,” Swagel said in an interview with the Financial Times.

The US was “not there yet”, he said, but as higher interest rates raise the cost of paying its creditors to $1tn in 2026, bond markets could “snap back”.

Read it all.

FT Exclusive: US debt is on an 'unprecedented' trajectory that could lead to a Liz Truss-style market shock, the head of Congress’s independent fiscal watchdog has warned https://t.co/JLiKKeQE9z pic.twitter.com/ljX3OpInL1

— Financial Times (@FT) March 26, 2024

Kali Gaddie was a college senior when the pandemic abruptly upended her life plans—and made her part of a big and deeply unhappy political force that figures to play a huge role in the 2024 election season.

Her graduation was postponed, she was let go from her college job and her summer internship got canceled. She spent the final months of school taking online classes from her parents’ house. “You would think that there’s a plan B or a safety net,” she said. “But there’s actually not.”

Today, Gaddie, 25, works as an office manager in Atlanta earning less than $35,000 a year. In her spare time, she uploads videos to TikTok, where she’s amassed thousands of followers. Now, that’s at risk of being taken away too. All of this has left her dejected and increasingly skeptical of politicians.

Young adults in Generation Z—those born in 1997 or after—have emerged from the pandemic feeling more disillusioned than any living generation before them, according to long-running surveys and interviews with dozens of young people around the country. They worry they’ll never make enough money to attain the security previous generations have achieved, citing their delayed launch into adulthood, an impenetrable housing market and loads of student debt.

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Young adult Gen Z voters are more disillusioned and pessimistic than any before. More here, including charts from *Generations*:https://t.co/bU8xNjCd9j

— Jean Twenge (author of GENERATIONS, iGEN) (@jean_twenge) March 15, 2024

Harvard University economics professor Kenneth Rogoff said both President Joe Biden and his predecessor and challenger Donald Trump risk sending US debt levels into dangerous territory as Washington fails to grasp that the era of ultra-low interest rates won’t come back.

“Washington in general has a very relaxed attitude towards debt that I think they’re going to be sorry about,” Rogoff said on Bloomberg Television’s Wall Street Week with David Westin. “It’s just not the free lunch that Congress and perhaps the two presidential candidates have gotten used to.”

While an exact “upper limit” for the federal debt cannot be known — it’s estimated by the Congressional Budget Office to climb to 116% of US gross domestic product by 2034 from 99% today — Rogoff warned that there will be challenges as the level increases.

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Harvard's Ken Rogoff said both President Joe Biden and challenger Donald Trump risk sending US debt levels into dangerous territory https://t.co/3uWRkNCiXA via @bpolitics

— Robert Burgess (@BobOnMarkets) March 13, 2024

During the next year, the United States faces an increasingly fragile global order strained by accelerating strategic competition among major powers, more intense and unpredictable transnational challenges, and multiple regional conflicts with far-reaching implications. An ambitious but anxious China, a confrontational Russia, some regional powers, such as Iran, and more capable non-state actors are challenging longstanding rules of the international system as well as U.S. primacy within it. Simultaneously, new technologies, fragilities in the public health sector, and environmental changes are more frequent, often have global impact and are harder to forecast…The world that emerges from this tumultuous period will be shaped by whoever offers the most persuasive arguments for how the world should be governed, how societies should be organized, and which systems are most effective at advancing economic growth and providing benefits for more people.

—Read it all.

The Annual Threat Assessment of the US Intelligence Community notes that the Chinese state-owned media targeted American political candidates on TikTok in the 2022 Midterms. Here's our investigation on how these accounts generated tens of million views https://t.co/yqNJHItzE7 pic.twitter.com/QIEhtnFzvQ

— Iain Martin (@_IainMartin) March 12, 2024

The debt load of the U.S. is growing at a quicker clip in recent months, increasing about $1 trillion nearly every 100 days.

The nation’s debt permanently crossed over to $34 trillion on Jan. 4, after briefly crossing the mark on Dec. 29, according to data from the U.S. Department of the Treasury. It reached $33 trillion on Sept. 15, 2023, and $32 trillion on June 15, 2023, hitting this accelerated pace. Before that, the $1 trillion move higher from $31 trillion took about eight months.

U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 trillion, as of Wednesday. Bank of America investment strategist Michael Hartnett believes the 100-day pattern will remain intact with the move from $34 trillion to $35 trillion.

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US national debt is rising at a rate of $1 trillion every 100 days. That is long-term unsustainable. https://t.co/7krjwWFfqL

— Anders Corr, Ph.D. (@anderscorr) March 2, 2024

Spending on safety net programs such as Social Security and Medicare continues to grow even as their trust funds face the prospect of being depleted in the next 10 years.

“Also boosting deficits are two underlying trends: the aging of the population and growth in federal health care costs per beneficiary,” Mr. Swagel said. “Those trends put upward pressure on mandatory spending.”

The national debt is likely to be even larger than the budget office is predicting, as its forecast assumes that the 2017 tax cuts that Republicans enacted will fully expire even though lawmakers are already considering extending many of the measures, including lower individual income tax brackets.

For the second time in less than a year, the budget office said it now expected Mr. Biden’s efforts to wean the nation from fossil fuels to be more popular with the public — and more expensive for taxpayers — than initially estimated.

Read it all.

New: U.S. Debt on Pace to Top $54 Trillion Over Next 10 Years w/ @jimtankersley https://t.co/VZ9wDWn5l2

— Alan Rappeport (@arappeport) February 7, 2024

Black Swan author Nassim Nicholas Taleb said the US deficit is swelling to a point that it would take a miracle to reverse the damage.

“So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” he said Monday night at an event for Universa Investments, the hedge fund firm he advises. “And a debt spiral is like a death spiral.”

Taleb defined the ballooning debt load as a “white swan,” a risk that’s more probable than a surprise “black swan” event. While he didn’t identify specific outcomes in markets, he did say white swans include both the US deficit and an economy that’s far more vulnerable to shocks than in prior years.

The reason for that, he said, is that the world is far more interconnected due to globalization, with issues in one region able to ricochet around the world.

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Black Swan author Nassim Nicholas Taleb says as long as you have a government continually extending the debt limit and doing deals because they're afraid of the consequences of doing the right thing, then eventually you're going to have a debt spiral. https://t.co/pQFrtVNqus

— Ben Woodward, CFA (@BennettWoodman) January 31, 2024

Schools across the country are preparing to see their budgets shift from flush to strained as billions of pandemic aid runs out in less than a year, putting at risk staffing and programs added with Covid-relief funds.

The 2023-24 school year represents the last full year in which districts can spend down what remains of the $180 billion in federal Covid-19 aid. High-poverty districts typically received more emergency relief, so now face steeper cuts as the money runs out.

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Billions in pandemic education aid runs out in under a year, posing a risk for schools that added staffing and programs with the Covid relief https://t.co/IM6bGBN2Q5

— The Wall Street Journal (@WSJ) October 30, 2023

In a year when the US economy exceeded almost everybody’s expectations, the underlying federal deficit roughly doubled, spotlighting a dire fiscal trajectory likely to only worsen the partisan budget battles in Washington.

The government ran a $2.02 trillion deficit for the fiscal year through September, after adjustments to remove the impact of President Joe Biden’s student-loan forgiveness program, which was scotched by the Supreme Court. The gap is $1.02 trillion more than the prior year.

The surge is a powerful illustration of a fiscal path that’s triggered warnings from economists, politicians and credit rating agencies. It also helps explain why yields on longer-term US Treasuries are reaching highs unseen since before the global financial crisis, with the government needing to issue ever more debt to cover the shortfall of revenues relative to spending. Ten-year yields surpassed 5% on Monday.

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The US government had a $2 trillion budget deficit for the fiscal year through September, a gap that's $1 trillion more than the prior year. https://t.co/M69cTCs6Yl pic.twitter.com/LMOoK3Nxen

— Lisa Abramowicz (@lisaabramowicz1) October 24, 2023

When it comes to the size of the federal government’s annual deficit, appearances can be deceiving.

The gap between spending and revenue for fiscal year 2023, which ended on Sept. 30, was $1.7 trillion, the Congressional Budget Office projected ahead of the official Treasury Department figures. That would be a roughly $300 billion widening in the shortfall from fiscal year 2022.

But the gap was actually much larger. That is because of the odd way President Biden’s attempt to broadly cancel student debt shows up in budget figures.

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The Federal Deficit Is Even Bigger Than It Looks: Student-debt cancellation complicates the numbers as higher interest rates make borrowing costlier https://t.co/UnnEwiCbb6 pic.twitter.com/WqwpDVfUfn

— Jesse Felder (@jessefelder) October 13, 2023

But the biggest consequences will be for the biggest borrower — namely the US government. As Greg Ip put it in Thursday’s Wall Street Journal, “Rising Interest Rates Mean Deficits Finally Matter.” It is no coincidence, he argued, that “the recent rise in bond yields came as Fitch Ratings downgraded its US credit rating, Treasury upped the size of its bond auctions, analysts began revising upward this year’s federal deficit, and Congress nearly shut down parts of the government over a failure to pass spending bills.”

US fiscal policy has long been on an unsustainable trajectory — for more than 20 years, in fact. But under President Joe Biden it has jumped the shark. The federal deficit looks like it will exceed 7% of GDP in fiscal 2023, after the Congressional Budget Office adjusts for the vagaries of policy on student debt forgiveness. That is a truly shocking number for an economy that is running at close to full employment. And, as I pointed out here a month ago, there is no scenario the CBO can devise in which the total debt relative to GDP does not keep growing, with spending driven up partly by the rising burden of interest payments.

The key problem, as Brian Riedl of the Manhattan Institute has pointed out, is that the average maturity of the federal debt is just 76 months. So even if the CBO is right, and long-term interest rates average 4% over the next three decades, the result will still be budget deficits rising to 10% of GDP. And each additional percentage point on interest rates would add an additional $2.8 trillion of debt service costs over 10 years.

This disastrous outcome is a perfect illustration of the law of unintended consequences.

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“In terms of total returns, this is the biggest bond market rout in 150 years.”https://t.co/ufQO76ioX6 via @opinion

— Bruce Mehlman (@bpmehlman) October 10, 2023

It is sobering to think that the US federal government was running a large budget surplus in 2000 and the gross debt ratio was 54pc of GDP.

A quarter of a century later the ratio is 120pc and vaulting past the 1945 peak. This is partly due to two big recessions and Covid, to be sure, but mostly due to three sets of unfunded tax cuts, two unfunded 21st-century wars and no serious effort to control ballooning middle-class entitlements.

David Kelly from JP Morgan says the US is looking at annual fiscal deficits of $2 trillion this year, next year, and as far as the eye can see. This is at a time of effectively full employment and what should be bumper tax revenues. The deficit could hit $3.5 trillion in the next downturn.

The US Treasury must roll over $8 trillion of existing debt and raise $2 trillion of fresh debt this fiscal year, even as the Fed tosses another $1 trillion onto the heap under its QT programme.

Investors have belatedly, and suddenly, woken up to the shocking implications of a structural budget deficit heading for 8pc of GDP even before any trouble starts. It is this that has driven up yields on US Treasuries by 100 basis points since July.

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If rates continue to rise the way that they’ve been rising, eventually there’s going to be a financial accident, eventually something will break, said JP Morgan’s David Lebovitz on Bloomberg Surveillance. https://t.co/ZsQ8NfcD3n must-read. we thank AEP & David Lebovitz @jpmorgan

— tom keene (@tomkeene) October 7, 2023

The unexpected deficit surge, which comes amid signs of strong growth in the economy overall, is likely to shape a fierce debate on Capitol Hill about the nation’s fiscal policies as lawmakers face a potential government shutdown this fall and choices over trillions of dollars in expiring tax cuts. The Senate will return this week from August recess, and the House will be back the following week. Biden and House Speaker Kevin McCarthy (R-Calif.) approved a deal in June to raise the nation’s borrowing limit, but it did little to alter the long-term debt trajectory.

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🇺🇸 U.S. deficit explodes even as economy grows – Washington Posthttps://t.co/IAXBFZ66WK pic.twitter.com/AEnOvk8hVP

— Christophe Barraud🛢🐳 (@C_Barraud) September 4, 2023

The development is owed partly to a rebound in immigration as the United States has eased pandemic-related restrictions, cleared processing backlogs and enacted more permissive policies. Labor supply has also received a boost as some demographic groups — including women in their prime working years — have returned to the job market in bigger numbers than anticipated, pushing their employment rates to record highs.

That influx has made the Fed’s job a little less painful. Hiring has been able to chug along at a solid clip without further overheating the labor market because job seekers are becoming available to replace those who are getting snapped up. Unemployment has held steady around 3.5 percent, and some data even suggests that staffing is becoming less strained. Wage growth has begun to slow, for instance, and workers are no longer pulling such long hours.

“Monetary policy is part of the story to get demand moving towards supply, but any help we can get from supply increasing, that’s good news,” John C. Williams, the president of the Federal Reserve Bank of New York, said in an interview with The Financial Times this month.

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The expanding supply of workers has allowed the Fed to accept the faster-than-expected hiring without slamming the brakes on the economy even more aggressively.

A Flood of New Workers Has Made the Fed’s Job Less Painful. Can It Persist? https://t.co/mvAz3MCsYF

— Sean Graf (@seangraf) July 24, 2023

Delays at naval shipyards mean that nearly 40% of US attack submarines are out of commission for repairs, about double the rate the Navy would like, according to new data released by the service.

As of this year, 18 of the US Navy’s 49 attack submarines — 37% — were out of commission, according to previously undisclosed Navy data published by the Congressional Research Service. That leaves the US at a critical disadvantage against China’s numerically superior fleet.

The maintenance backlog has “substantially reduced” the number of nuclear submarines operational at any given moment, cutting the “force’s capacity for meeting day-to-day mission demands and potentially putting increased operational pressure” on submarines that are in service, CRS naval analyst Ronald O’Rourke said in a July 6 report.

That’s up from 28% overall in 2017 and 33% in 2022, and below the industry best practice of 20%.

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Backlogs at overworked shipyards have left US attack submarines at a crucial disadvantage against China’s numerically superior fleet https://t.co/N0DOKv7yse

— Bloomberg (@business) July 11, 2023

The mandate was an attempt by the Biden administration to define sex to include “gender identity” for the purposes of Health and Human Services (HHS) regulations. Critics say the rule would have required doctors, clinics, and hospitals to perform procedures to which they object and insurance companies to pay for such procedures.

The Southern Baptist Convention’s Ethics and Religious Liberty Commission (ERLC) president Brent Leatherwood welcomed the news.

“The Biden administration’s decision to back down from the transgender mandate marks a significant victory in safeguarding the rights of medical professionals to operate in a manner consistent with their deepest held beliefs,” Leatherwood said in written comments.

“This is an important development we should take note of because it not only represents a win for conscience rights but also furthers efforts to shield vulnerable individuals who should never become pawns in the sexual revolution.”

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Over $200 billion from the U.S. government’s COVID-19 relief programs were likely stolen, a federal watchdog said on Tuesday, adding that the U.S. Small Business Administration (SBA) had weakened its controls in a rush to disburse the funds.

At least 17% of all funds related to the government’s coronavirus Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) schemes were disbursed to potentially fraudulent actors, according to a report released Tuesday by the SBA’s office of inspector general.

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Over $200 billion likely stolen from U.S. COVID relief programs, watchdog says https://t.co/ipofUWaBm2 pic.twitter.com/Nt4CTgxDdA

— Reuters Politics (@ReutersPolitics) June 27, 2023

Headline rates of inflation across most of the world’s economies have fallen back sharply since the autumn but core rates — which exclude volatile categories such as energy and food — remain at or close to multi-decade highs.

These rates, seen as a better gauge of underlying price pressures, have sparked concern that central banks will struggle to hit their targets without wiping out growth.

“The next leg of the improvement in the inflation numbers is going to be harder,” said Carl Riccadonna, chief US economist at BNP Paribas. “It requires more pain, and that pain likely involves a recession in the back half of the year.”

Torsten Slok, chief economist at Apollo Global Management, added: “The only way to get inflation down to 2 per cent is to crush demand and slow down the economy in a more substantial way.”

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“The next leg of the improvement in the inflation numbers is going to be harder. It requires more pain:” BNP's Riccadonna

Apollo's Torsten Slok: “The only way to get inflation down to 2% is to crush demand.”
https://t.co/8BVmtH9pdm

— Lisa Abramowicz (@lisaabramowicz1) June 23, 2023

The Republicans have capitulated on the US debt ceiling. This averts the risk of abrupt fiscal tightening in a slowing economy that has yet to digest the most aggressive monetary squeeze in over 40 years.

The putative accord between the White House and Congress does not even try to address the larger threat to America’s economic model and hegemonic status.

The Congressional Budget Office says the US is on course for fiscal deficits of 7pc of GDP as far as the eye can see.

Sacred entitlements remain untouchable. Middle-class welfare – ie. consumption – will continue to eat up an ever-greater share of the budget. It is this that is leading to slow fiscal ruin.

The gross debt-to-GDP ratio was 62pc in 2007 (IMF data). It will be 122pc this year, and 138pc by 2028, with no sign of reaching a plateau. By then it will have overtaken Italy.

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“It is a sobering thought that the US is racking up as much debt-to-GDP accumulation over 20 years as it did over two world wars and the Great Depression combined”

✍️ Ambrose Evans-Pritchardhttps://t.co/wWkRv2XYKd

— Telegraph Business (@telebusiness) May 30, 2023

Treasury Secretary Janet Yellen said that the government could become unable to pay bills on time by June 1. In that case, the Treasury Department could halt payments, such as to federal employees or veterans.

In a worst-case scenario, a failure to pay holders of U.S. government debt, a linchpin of the global financial system, could trigger severe recession and send stock prices plummeting and borrowing costs soaring.

Many economists don’t expect a default for the first time in U.S. history. But they outline three potential ways the standoff could affect the economy and financial system, ranging from not great to extremely scary.

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U.S. lawmakers might have just days to act before the standoff over the debt ceiling reverberates through the economy https://t.co/JM1UfZ7HfW

— Real Time Economics (@WSJecon) May 22, 2023

…ultimately, to truly integrate and capitalize on AI, U.S. defense leaders will need to shift how they measure military capability. The Pentagon will never give artificial intelligence its due when it does not consider AI to be a key component of military strength. When military leaders appear before Congress to advocate for their budgets, they make their case in terms of industrial-age metrics. The navy, for example, lays out how many ships it requires, while the air force spells out how many aircraft it has to purchase. These measurements still matter, but what matters more today is the digital capabilities of these systems, such as whether the ships and planes have sensors to detect enemy forces, algorithms that can process information and enable better decision-making, and intelligent munitions to precisely strike targets. All these capabilities can be improved with artificial intelligence, and U.S. leaders must begin taking them into account.

It will not be easy for the armed forces to make these changes: the American military is a vast and unwieldy bureaucracy. It will also be hard for the U.S. government as a whole to adjust to the rise of AI, given how polarized Washington is. Reforms to high-skilled immigration, in particular, have run into repeat resistance from conservatives on Capitol Hill. And the fact that today’s AI systems have major limitations—and therefore require great caution and care during implementation—further complicates the process. Military service members will not use systems they do not trust, and so military officials must make sure that when AI is deployed it works as intended.

But the pieces of a better AI strategy are falling into place. The Pentagon may not yet properly measure the power of artificial intelligence, but it is paying much more attention to the technology. The federal government has increased spending and is exploring data and computing resources for academics. The White House is trying to make it easier for foreign STEM workers to come to the country. The United States, in other words, is working to ensure that China cannot fully catch up. If Washington ultimately maintains control over the semiconductor supply chain, maximizes the inflow of talent, and fields trustworthy systems, it will succeed in staying ahead. As the AI revolution reshapes global power, the United States can come out on top.

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Washington’s immigration policies are making it more difficult to recruit foreign scientists—and, as a result, threatening the country’s advantage in the AI race, writes @paul_scharre. https://t.co/z1UR0faYUp

— Foreign Affairs (@ForeignAffairs) April 4, 2023

The Federal Reserve is facing criticism over Silicon Valley Bank’s collapse, with lawmakers and financial regulation experts asking why the regulator failed to catch and stop seemingly obvious risks. That concern is galvanizing a review of how the central bank oversees financial institutions — one that could end in stricter rules for a range of banks.

In particular, the episode could result in meaningful regulatory and supervisory changes for institutions — like Silicon Valley Bank — that are large but not large enough to be considered globally systemic and thus subject to tougher oversight and rules. Smaller banks face lighter regulations than the largest ones, which go through regular and extensive tests of their financial health and have to more closely police how much easy-to-tap cash they have to serve as a buffer in times of crisis.

Regulators and lawmakers are focused both on whether a deregulatory push in 2018, during the Trump administration, went too far, and on whether existing rules are sufficient in a changing world.

While it is too early to predict the outcome, the shock waves that Silicon Valley Bank’s demise sent through the financial system, and the sweeping response the government staged to prevent it from inciting a nationwide bank run, are clearly intensifying the pressure for stronger oversight.

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What happened at Silicon Valley Bank? The failure has accusing fingers pointed at the Fed. And at the central bank, it's kicked off a bout of regulatory soul-searching.

with @FlitterOnFraud https://t.co/qptaFO0iSO

— Jeanna Smialek (@jeannasmialek) March 15, 2023

President Biden scored an early political point this month in his fight with congressional Republicans over taxes, spending and raising the federal debt limit: He forced Republican leaders to profess, repeatedly, that they will not seek cuts to Social Security and Medicare.

In the process, Mr. Biden has effectively steered a debate about fiscal responsibility away from two cherished safety-net programs for seniors, just as those plans are poised for a decade of rapid spending growth.

New forecasts from the nonpartisan Congressional Budget Office, released on Wednesday, showed Medicare and Social Security spending growth rapidly outpacing the growth in federal tax revenues over the next 10 years. That is the product of a wave of baby boomers reaching retirement age and beginning to tap the programs, which provide guaranteed income and health insurance from the time benefits are claimed until death.

Those retirees are an electoral force. In refusing to touch so-called entitlement programs, Mr. Biden was appealing to seniors, along with generations of future retirees, when he used his State of the Union address and subsequent speeches this month to amplify attacks on Republican plans to reduce future spending on Social Security and Medicare or potentially sunset the programs entirely.

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A healthy country would tackle this program head on and make the necessary adjustments and compromises to do so 4/4 https://t.co/bjLzztGF23 #socialsecurity #medicare #unfundedliabilities #usa #Stewardship all we are doing now is making things worse for those who come after us

— Kendall Harmon (@KendallHarmon6) February 16, 2023

The U.S. government may have awarded roughly $5.4 billion in coronavirus aid to small businesses with potentially ineligible Social Security numbers, offering the latest indication that Washington’s haste earlier in the pandemic opened the door for widespread waste, fraud and abuse.

The top watchdog overseeing stimulus spending — called the Pandemic Response Accountability Committee, or PRAC — offered the estimate in an alert issued Monday and shared early with The Washington Post. It came as House Republicans prepared to hold their first hearing this week to study the roughly $5 trillion in federal stimulus aid approved since spring 2020.

The suspected wave of grift targeted two of the government’s most generous emergency initiatives: the Paycheck Protection Program, known as PPP, and the Economic Injury Disaster Loan, dubbed EIDL. Started under President Donald Trump — and managed by the beleaguered Small Business Administration — the roughly $1 trillion in loans and grants aimed to help cash-strapped companies stay afloat financially during the worst economic crisis since the Great Depression.

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Some $5.4B in #COVID19 aid may have gone to businesses using fishy Social Security numbers. Nearly 70,000 suspect SSNs, including ones that didn't exist or didn't match name & birth records.
House #Republicans are holding hearings on aid fraud this week.https://t.co/m4Mteizpdr

— Laurie Garrett (@Laurie_Garrett) January 30, 2023

Eighteen months ago, the online used car retailer Carvana had such great prospects that it was worth $80 billion. Now it is valued at less than $1.5 billion, a 98 percent plunge, and is struggling to survive.

Many other tech companies are also seeing their fortunes reverse and their dreams dim. They are shedding employees, cutting back, watching their financial valuations shrivel — even as the larger economy chugs along with a low unemployment rate and a 3.2 percent annualized growth rate in the third quarter.

One largely unacknowledged explanation: An unprecedented era of rock-bottom interest rates has abruptly ended. Money is no longer virtually free.

For over a decade, investors desperate for returns sent their money to Silicon Valley, which pumped it into a wide range of start-ups that might not have received a nod in less heady times. Extreme valuations made it easy to issue stock or take on loans to expand aggressively or to offer sweet deals to potential customers that quickly boosted market share.

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High valuations in Silicon Valley made it easy to issue stock or take on loans to expand aggressively or to offer sweet deals to potential customers that quickly expanded market share. Not anymore, @DavidStreitfeld reports. https://t.co/rHsLe5mXfZ

— NYTimes Tech (@nytimestech) January 24, 2023

The FBI’s purpose, according to Herbert N. Foerstel in his book “Surveillance in the Stacks,” was to demand details about library use by people from countries “hostile to the United States, such as the Soviet Union.” Agents tended to approach whoever was at the reference desk — often a student assistant or paraprofessional — and ask for names and other details of people who used the library to locate technical and scientific materials, such as engineering journals and publications of the National Technical Information Service. At the University of Wisconsin, according to Foerstel, agents watched a Soviet national reading the Russian newspaper “Pravda” and then asked a librarian if that copy “had been marked up.”

The rise in book bans, explained
The public was largely ignorant of these encounters until the case of Gennady Zakharov, a Russian-born United Nations aide who was indicted in 1986 for trying to transmit “unclassified information about [American] robotics and computer technology” to the Soviets. His source turned out to be a Guyanese college student who stole publicly available microfiche from several New York-area libraries and sold it to Zakharov.

The next year, the New York Times reported for the first time on the existence of the Library Awareness Program, calling it part of a national counterintelligence effort.

The FBI immediately tried to downplay the program’s significance. “Hostile intelligence has had some success working the campuses and libraries,” said James Fox, deputy assistant director of the New York FBI office, “and we’re just going around telling people what to be alert for.”

This explanation didn’t satisfy librarians. “We’re extremely concerned,” said Betsy Pinover, public relations director of the New York Public Library, “about intellectual freedom and the reader’s right to privacy, and are committed to protecting the privacy of our readers.” The New York Library Association and American Library Association issued similar statements. Rep. Major R. Owens (D-N.Y.), a former librarian, called it “a new low for the anti-intellectualism of the Reagan administration.” Cartoonists took aim; humorists made hay.

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When the FBI Was Secretly Spying on People's Library Habits | @washingtonpost https://t.co/0jLhLJEkO9

— Publishers Weekly (@PublishersWkly) January 24, 2023

Republicans, who have newly taken control of the House of Representatives, say that they cannot abide runaway spending and must rein it in. This deep concern appears episodic. When Donald Trump was president, the debt ceiling was increased three times with Republican support, and the national debt rose by $8trn over his term ($3.2trn of which came before covid-induced spending began in 2020). Those increases were not particularly contentious, and the White House wishes the same for this one. “Raising the debt ceiling is not a negotiation; it is an obligation of this country and its leaders to avoid economic chaos,” Mr Biden’s press secretary said in a statement released on January 20th.

But it may not be so simple. Republicans are unlikely to let their leverage over Mr Biden lapse. Kevin McCarthy squeaked into his position of Republican speaker of the House by promising many concessions to hardliners, including pledging extreme brinkmanship over the debt ceiling. Mr McCarthy has vowed to secure spending cuts in exchange for raising the debt limit, and pledged to put the country on the path to a balanced budget in a decade. As part of his bargain to attain power, the beleaguered speaker also had to allow a parliamentary manoeuvre that would make his own removal easier. Mr McCarthy may not be able to keep his promises, in which case his own party could end his speakership in its first year.

This is forcing financiers, lawyers and officials to focus on the unthinkable. The starting point of such contingency planning is that a sovereign default would be cataclysmic: in all likelihood stocks would plunge, borrowing costs would soar, growth would suffer and the dollar’s status as the world’s dominant currency would be shaken. Any way to avoid this series of disasters merits attention. The problem, unfortunately, is that each proposed workaround has severe—and quite possibly unworkable—drawbacks.

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Most games of chicken do not have trillion-dollar stakes. But such a spectacle is common in America https://t.co/18TkzGkAnt

— The Economist (@TheEconomist) January 23, 2023

Washington is gearing up for another big fight over whether to raise or suspend the nation’s debt limit, with Treasury Secretary Janet L. Yellen telling Congress on Thursday that the United States had reached its existing borrowing cap of $31.4 trillion.

The United States borrows huge sums of money by selling Treasury bonds to investors across the globe and uses those funds to pay existing financial obligations, including military salaries, safety net benefits and interest on the national debt. Once the United States hits the cap, Treasury begins using “extraordinary measures” — suspending some investments and exchanging different types of debt — to try to stay beneath the cap for as long as possible. But eventually, the United States will need to either borrow more money to pay its bills or stop making good on its financial obligations, including possibly defaulting on its debt.

Responsibility for lifting or suspending the borrowing cap falls to Congress, which must get a simple majority in both the House and Senate to vote for any change to the debt limit. Raising the debt limit has become a perennial fight, with Republican lawmakers using it as leverage to try to force spending cuts.

This year is shaping up to be the messiest fight in at least a decade. Republicans now control the House and they have adopted new rules that make it more difficult to raise the debt limit and strengthen Republicans’ ability to demand that any increase be accompanied by spending cuts. Senate Republicans have also insisted that increases to the debt limit should be tied to “structural spending reform.”

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The U.S. Will Hit Its Debt Limit Today. How Bad Will It Be? – The New York Times https://t.co/Dw7I3uRvAx

— Louisette Lanteigne 🌎✌️⚖️♥️ (@lulex) January 19, 2023

Prices continued to climb at a brutally rapid pace in September, with a key inflation index increasing at the fastest rate in 40 years, bad news for the Federal Reserve as it struggles to wrestle the cost of living back under control.

Overall inflation climbed 8.2 percent over the year through September, according to the latest Consumer Price Index report on Thursday, a slight moderation from August but more than what economists had expected.

Even more worrisome, underlying inflation trends are headed in the wrong direction. After stripping out fuel and food — which are volatile and removed to get a better sense of the trajectory — prices climbed 6.6 percent over the year through September. That was the quickest rate since 1982.

Inflation has been rapid for a year and a half now, and it is proving stubborn even as the Fed mounts its most aggressive campaign in generations to slow the economy and bring price increases under control. Fast inflation has also triggered the highest Social Security cost-of-living adjustment in decades — an 8.7 percent increase in benefits to retired and disabled Americans, a move that was announced Thursday.

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Inflation Is Unrelenting, Bad News for the Fed and White House https://t.co/VC0vlFl1h8

— Bill Labovitz (@wlabovitz) October 13, 2022