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Biden’s plan to write off education expenses will cost the U.S. budget $1 trillion — estimate

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write off education expenses

News about write-off education expenses: U.S. President Joe Biden’s initiative to reduce the debt burden on Americanswho took out loans for education will cost the country’s budget $1 trillion, The Wall Street Journal wrote, about the opinion of analysts.

At the end of August, Biden announced a $10,000 to $20,000 education loan write-off that would affect millions of people. It will cost the U.S. budget about $1 trillion, according to the Penn Wharton Budget Model, an authoritative model of the U.S. federal budget calculated by the Wharton School of Business at the University of Pennsylvania.

An official estimate of the budget cost of writing off loans has not yet been made public. The only figure voiced by the White House is $240 billion in lost revenues over 10 years due to early repayment of state education loans.

U.S. authorities expect that about 75% of eligible students will take part in the program – a standard figure for such programs, the WSJ wrote. Meanwhile, Kent Smetters, head of the Wharton Model, believes the percentage could be much higher – depending on how easy the application process for the program is.

The cumulative amount of outstanding education loans in the U.S. is estimated at $1.7 trillion. Discussions about the need for federal measures to reduce the debt burden on former students have long been ongoing, as many Americans complain about the inability to pay off student debt even decades later and with relatively high wages.

The U.S. budget deficit for the current fiscal year will be $1.03 trillion, according to an August estimate by the White House. Compared to the previous fiscal year, the negative balance will decrease by about $1.7 trillion, but will still be higher than in fiscal 2019, when the deficit was $984 billion. 

Earlier, we reported that the drop in German industrial orders accelerated to 1.1% in July.

Economy

Costs of electricity in Italy rose by more than 76% in August

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cost of electricity in Italy

Costs of electricity in Italy rose by 76.4% in August, compared with an average of 51.9% in the euro area. La Repubblica writes about it, citing the estimates of Italy’s Confartigianato, an association of small and medium-sized businesses.

“Italy has structural problems. Here the cost of gas and electricity has always been very high because of the nature of production and the fact that there has never been an appropriate energy plan. Therefore, the average electricity bill in Italy will continue to rise,” said the head of Confartigianato, Bruno Pannier.

According to him, now Italy can concentrate on the production of energy from renewable sources. In this matter, the country is in a better position than other countries of the European Union, in particular due to the climate.

The newspaper said that in July electricity and gas prices in France jumped by 23.8%; in Germany – by 46% and in Spain – 54.3%, while in Italy the increase was 59.1%.

Earlier we reported that Nord Streams was almost completely out of service due to malfunctions.

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Economy

The situation in Europe is worsening. Rising food and energy prices are becoming a growing problem

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rising food and energy prices

The situation with rising food and energy prices in the EU soon will only get worse. This follows from the statement of the head of the European Central Bank Christine Lagarde.

British residents have already spent more than half of their savings. According to The Times, monthly expenditures on British energy prices are growing by a record £145. The pound itself reached a historic low against the dollar and almost equaled it. The sharp decline occurred after the decision of the British government to reduce taxes in the country.

Against this backdrop, Parliament began to prepare a vote of no confidence in the new Prime Minister, Liz Truss, who proposed new economic measures. The situation in Germany is also difficult. As German Finance Minister Christian Lindner admitted, he does not yet know how to fight gas prices.

“We are working in parallel with the commission on gas prices, which was created by the federal government. And so we will be looking for ways in which we can put price control into practice. I have an idea of what direction to think, but I don’t really want to go into all the details,” Ridus said.

Earlier, we reported that cryptocurrencies and the dollar began a showdown for the title of most profitable asset.

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Economy

Nord stream sabotage? “Nord Streams” is almost completely out of order due to malfunctions

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nord stream sabotage

The Nord Stream and Nord Stream 2 gas pipelines are almost completely out of service due to various faults. Many are voicing opinions about sabotage on Nord Stream.

Both gas supply routes to Europe via the Baltic Sea bed are out of service. First there was the Nord Stream 2 accident, where the pressure on one of the lines dropped drastically. The cause of the leakage is currently being investigated. Then pressure dropped in both strings of Nord Stream, but the reason for the drop in pressure is still unknown. There are serious reasons to assume a Nord Stream attack.

The publication noted that the German authorities have already started working with the Danish authorities and local law enforcement agencies to find out the reason for the pressure drop in Nord Stream-2. However, it is not clear how the pipeline will be repaired, as it is under U.S. sanctions and bankruptcy proceedings, although it has been postponed until January 2023.

At the moment it is impossible to name the exact cause of the malfunctions that have occurred. However, the sudden drop in pressure may indicate not just a leak, but a much more serious problem. Also, this accident could have certain consequences for the entire gas market, and repairs could take quite a long time.

Earlier we reported that British banks had begun stopping some mortgage deals because of the pound falling against the dollar.

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