The US debt crisis has reached a new level of severity, as the latest data shows that the federal government has been borrowing an average of $1.2 billion per hour for the past 19 days. This means that the national debt has increased by more than $22.8 billion per day, or $456 billion in total, since September 22, when the debt limit was reached.
The debt limit, also known as the debt ceiling, is the legal limit on how much the US Treasury can borrow to fund the government’s spending and obligations. Congress has to periodically raise the debt limit to avoid a default, which could have catastrophic consequences for the global economy and financial markets.
However, Congress has been unable to agree on a bipartisan solution to raise the debt limit, as Republicans have refused to cooperate with Democrats, who control both chambers of Congress and the White House. Republicans have argued that Democrats should use a special budget process called reconciliation to raise the debt limit on their own, without Republican votes. Democrats have rejected this option, saying that raising the debt limit is a shared responsibility that should not be politicized.
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As a result of this impasse, the US Treasury has been using extraordinary measures to keep paying the government’s bills and avoid a default. These measures include suspending investments in federal retirement funds, postponing payments to state and local governments, and drawing down cash reserves. However, these measures are not enough to cover the government’s spending gap, which is why the Treasury has been borrowing at an unprecedented rate.
According to the Treasury Department, these extraordinary measures will run out by October 31, which means that the US will face a default if Congress does not raise the debt limit by then. A default would mean that the US would not be able to pay its creditors, its employees, its social security beneficiaries, its military personnel, and its contractors. It would also mean that the US would lose its AAA credit rating, which could trigger higher interest rates, lower economic growth, and higher inflation.
The US debt crisis is not only a domestic problem, but also a global one. The US dollar is the world’s reserve currency, and US Treasury bonds are considered the safest and most liquid assets in the world. A default by the US would undermine confidence in the dollar and in the global financial system, potentially causing a panic and a contagion effect across countries and markets.
Therefore, it is imperative that Congress acts swiftly and responsibly to raise the debt limit and avoid a default. The US cannot afford to jeopardize its economic recovery and its global leadership by playing political games with its creditworthiness. The US debt crisis is not a game, but a serious threat that must be resolved as soon as possible.
Binance’s $1B Crypto Recovery Fund deployed less than $30M.
Binance, the world’s largest cryptocurrency exchange by trading volume, has been on a mission to recover stolen or lost crypto assets from various hacking incidents. The company launched a $1 billion fund in July 2021 to support this effort, as well as to foster innovation and collaboration in the crypto industry. However, according to a recent report by Bloomberg, the fund has only deployed less than $30 million so far, raising questions about its effectiveness and transparency.
The report cites anonymous sources familiar with the matter, who claim that Binance has only used the fund to reimburse victims of two major hacks: the Poly Network hack in August 2021, which resulted in $610 million worth of crypto being stolen, and the BitMart hack in December 2021, which saw $196 million worth of crypto being taken.
Binance reportedly contributed $10 million and $15 million respectively to these cases, as well as some smaller amounts to other incidents. The sources also allege that Binance has not disclosed how the fund is managed, who is in charge of it, or how it decides which cases to support.
Binance has not commented on the report or confirmed the figures. However, the company has previously stated that the fund is not a charity, but a strategic investment vehicle that aims to enhance the security and sustainability of the crypto ecosystem. Binance has also said that the fund is open to partnering with other industry players, such as law enforcement agencies, security firms, and other exchanges, to track down and recover stolen funds.
The fund is part of Binance’s broader efforts to improve its reputation and compliance amid increasing regulatory scrutiny and pressure from authorities around the world. The exchange has faced bans, warnings, investigations, and lawsuits in several jurisdictions over its operations, services, and products. Binance has also hired several former regulators and experts to bolster its legal and compliance teams and has pledged to cooperate with regulators and follow local laws.
However, some critics argue that Binance’s actions are too little, too late, and that the exchange is still operating in a gray area without proper oversight or accountability. They also point out that Binance’s recovery fund may not be enough to cover the potential losses from future hacks or scams, given the growing size and complexity of the crypto market. Moreover, they question whether Binance’s fund is truly altruistic or motivated by self-interest, as it may benefit from boosting its own image and customer loyalty.