The debt download. The U.S. Senate passed a bill last week temporarily increasing the debt ceiling by $480 billion, which will allow the country to continue to meet its financial obligations through December 3, 2021. The debt ceiling is a borrowing limit set by Congress that must be increased every few years. The Senate voted along party lines, with 11 Republican Senators joining all 50 Democratic Senators to avoid a filibuster. Although Democrats in the House passed a stopgap spending bill two weeks ago that would have suspended the country’s debt ceiling until the end of 2022, Republicans in the Senate said they weren’t interested. Without an extension, the federal government would have run out of money by the middle of October, which could have triggered a wider economic crisis, according to Treasury Secretary Janet Yellen.
- The takeaway: Congress still needs to work out legislation to raise the limit again before the end of the year. Failing to increase the debt limit could have severe consequences, which could include the government defaulting on its debts. That in turn could spark a downgrading of the U.S. credit rating, which happened in 2011, the last time Congress sparred over increasing the borrowing limit. Downgrading the U.S. credit rating could increase borrowing costs for the federal government, and could derail the economic recovery. For consumers, consequences might include a falling stock market and potential increases to unemployment.
Twitch’s big glitch. Video game-streaming platform Twitch was the target of a recent hack that targeted 125 GB of proprietary data, including information critical to the app’s operations. On the forum 4chan, an anonymous hacker released the data, which included the source code for Twitch.tv, Twitch, mobile, desktop, and game console clients, proprietary SDKs, Twitch properties such as Vapor, and internal security tools. Twitch was acquired by Amazon in 2014. The hacker suggested that this release of data would be the first of a series, and said that the inspiration for the attack was a recent increase in hate on the platform. Bots have reportedly been attacking the chats of marginalized users with hate speech. The hacker said they hoped to create “disruption and competition in the online video game streaming space.”
- The takeaway: The hack is one of the biggest in recent years, and could hurt not only Twitch, but could prove even more of a headache for parent company Amazon. Amazon Web Services (AWS) is one of the largest cloud providers in the world, and it depends on its state-of-the-art security to maintain its customer base. While Amazon owns Twitch, the streamer has yet to move most of its functions over to AWS, and it still uses mostly its own technology. But the hack could still indicate a failure on Amazon’s part to tightly oversee Twitch’s cloud technology and security. The hack also upset some creators who use the app, because the hack reportedly revealed how much revenue many of those users generate.
Please forgive us. The U.S. Department of Education announced plans to cancel the educational debt of more than 550,000 public workers. Numerous government and nonprofit workers reportedly will qualify for loan forgiveness due to recent Biden Administration changes to a federal program started in 2007. The program’s original goal was to cancel debt for many public workers, but it reportedly has been bogged down by administrative difficulties. About 22,000 people reportedly will be automatically eligible for loan forgiveness.
- The takeaway. The Biden administration is reportedly exploring options for more widespread student loan forgiveness. Millions of U.S. consumers have student loan debt, totaling about $1.6 trillion as of March 2021. Currently, because of the pandemic, federal student loans are in a forbearance period through January 2022. In June 2021, the Department of Education recently approved $500 million in student loan forgiveness for former students of ITT Technical Institute, a private chain of colleges that was shut down in 2016 for misrepresentation. In August, The Biden administration announced that it will cancel the student loan debt held by severely disabled people. The change will affect 323,000 borrowers holding $5.8 billion in debt.
Malaria’s new rival. The World Health Organization (WHO) recommended the widespread use of a new malaria vaccine RTS,S, also known as Mosquirix. The vaccine, which was developed by British pharmaceutical company GlaxoSmithKline (GSK), showed a 39% efficacy rate in preventing malaria cases, and a 29% success rate in preventing severe cases, in clinical trials of young African children. The trials also demonstrated a 70% reduction in hospitalizations or death when the vaccine is used in combination with antimalarial drugs. The deployment of the vaccine could reportedly save tens of thousands of lives, as some countries in Africa have seen resurgences of the mosquito-borne disease.
- The takeaway: The news of an effective malaria vaccine comes toward the end of a big year for vaccine development. In 2021, vaccine makers Pfizer, Moderna, Johnson & Johnson, and others have introduced Covid-19 vaccines to people across the globe in record time to fight the pandemic. More than 3.64 billion people have been vaccinated against Covid-19 worldwide, receiving at least one dose of a typically two-dose regimen. Researchers hope that the news of GSK’s vaccine will inspire other developers to focus on malaria. Earlier this year, a vaccine made by the Jenner Institute at Oxford University showed a 77% efficacy rate in an early trial.
Thrown under the bus. Covid-19 has nearly decimated an industry few people talk about: inter-city bus travel. Ridership is reportedly down approximately 80% compared to pre-pandemic levels, and national lines including Greyhound, the largest national provider of bus service, reportedly have been forced to cut back service and reduce the number of drivers.
- The takeaway: Although national airlines and rail transit systems got more than $50 billion in federal relief to weather the Covid-19 storm starting in 2020, inter-city bus companies got a fraction of that, reportedly splitting $2 billion in aid with school bus, motor coach, and passenger transportation services such as whale-whale watching companies. Tens of millions of people, including many lower income consumers, depend on inter-city bus transportation between smaller towns and cities.
Here’s what we covered in last week’s Scan:
- Congress narrowly avoided a government shutdown with a spending bill.
- Ford said it will build a plant entirely dedicated to building electric vehicles.
- Student loan servicer Navient will end its contract with the Department of Education.
- Merck has developed a pill that could shake up the treatment of Covid-19.