US Deficit at Wartime Levels, Estimated to Double to $2 Trillion

And thank you for joining me here, I'm Don Ma. We have a number of stories actually today about China in the later half of the show. But first, big news regarding to the US deficit. According to a government watchdog group, the federal budget deficit is expected to nearly double to 2 trillion dollars for the 2023 fiscal year. The increase stems from a sharp decline in tax revenues and an increase in mandatory spending on Social Security, Medicare and interest payments. The deficit projected from the Committee for a Responsible Federal Budget and its tally for the 2022 fiscal year does not include President Joe Biden's Federal Student Debt Cancellation Plan, which was struck down by the Supreme Court. The growing deficit could also further complicate discussions over funding federal agencies by the upcoming fiscal year starting October 1st. Congress will have until the end of the month to pass the spending package or a short-term deal to keep the government operating. And this deficit in the long term could actually impact the US GDP growth because there is a strong correlation between the US debt and the growth of the economy when you're looking at chart comparisons. And a global shortage of technicians and independent repair shops qualified to fix electric vehicles threatens to increase repair and warranty costs for drivers. Here's more. Electric vehicles may be the future for car drivers, but what happens if yours breaks down? Industry experts say that could be a problem. There is a global shortage of technicians and repair shops qualified to fix EVs. That means drivers could face high costs for repairs if they can get one. Experts say that independent repair shops will be vital for making EVs affordable as they are cheaper than franchise dealers. But many garage owners see costs for training and equipment to fix EVs as too high, especially with few of the cars on the roads. There's a danger too. High voltage EVs could shock or even kill untrained technicians. The risk of EV fires, which are notoriously hard to put out, is also a big concern. The auto repair industry has been short of workers since the global health crisis. A UK-based industry body forecasts that the country could be short 25,000 EV technicians by 2032. That's not great when the country is aiming to ban the sale of fossil fuel cars from 2030. Over in the US, experts predict around 80,000 electrician jobs, including for EVs, will be needed every year through 2031. If you can get a fix, it may not be cheap. British car warranty provider WarrantyWise says garage costs are rising. It says it has to use expensive franchise dealers to fix EVs, as they tend to have more qualified technicians. Warranties on such cars cost more as a result. Now car makers are scrambling to train technicians. Market leader Tesla has launched courses at US community colleges. It also provides EV training for independent US repair shops. Such efforts will need to pay off fast, or experts say the electric car revolution risks going flat. And Bud Light's parent company has a prominent investor, it seems like, even as it deals with a sales slump. Last quarter, the Bill and Melinda Gates Foundation Trust bought $95 million worth of shares in Anheuser-Busch. Gates bought the stock around the time Bud Light alienated some of the company's core base because of its partnership with transgender influencer Dylan Mulvaney. And since then, Anheuser-Busch stock has dropped about 2%, losing Gates money. Gates has previously admitted he's not a big beer drinker, but he's also invested nearly $1 billion worth of shares in Hennigan Holdings. And California's housing affordability hits a consecutive low, while single-family home prices continue their climb upward from last year. A realtor tells NTD's Christina Corona more on the housing market. California's housing affordability has hit a 16-year low as home prices reach sky-high values, turning the American dream into a challenging climb. Douglas Lee from Compass Real Estate says there are two main factors that have caused California's housing affordability to drop. The first one is low interest rates, and the second one is low supply. So since 2000, since the implosion in 2002, the Fed has been cutting interest rates. And what that's done is with cheap money, it's spurred a lot of purchasing. Lee tells us which areas and types of homes are affected most by the affordability issue. Basically any area that's close to all the jobs. So if you're looking at areas that are driving distance to downtown LA, downtown San Diego, Orange County, San Francisco Bay Area, all the heavy job areas, those are the ones that are going to be a lot more heavily impacted by affordability. So basically getting into anything, a single family home, a condo, a townhome, just trying to get anything. He tells us real estate's only going to go one direction in California, and that's up. With high or low interest rates, the most important thing Lee suggests is to just get in. As long as you can commit to hitting those monthly payments, hell over high water, you're going to hold on to it long enough that when you sell, you'll make your money. What was the average price for a single family home in 2023? The medium price was around $863,000, and the average was $995,000, and that's for a three bedroom, two bath, 1,200 square foot minimum size home. Lee tells us how, for the first time in 2023, single family home prices in California have surpassed those from a year ago. So when we talk about supply, I've been tracking the data, it's two months of inventory. A normal market is six, six months. If you have below six, it's a seller's market, in which case this is. At two months, what that means is that if no new listings hit the market, it would take us two months until we sold everything else out. As home prices continue to climb compared to a year ago, California's housing affordability has taken a noticeable hit. However, there are resources and assistance programs available to help residents achieve their dream of home ownership. Christina Corona, NTD News, Los Angeles. And Goldman Sachs is saying it's optimistic the U.S. will avoid a recession in the next 12 months. Its new report called Soft Landing Summer puts the odds of such contraction at 15 percent. That's similar to the historical average for any given year, by the way. The report suggests wages will grow faster than prices, overcoming rate increases from the Federal Reserve. Goldman is largely on its own, though, with its rosy outlook. The Bloomberg consensus is that the U.S. has a 60 percent chance of recession. Meanwhile, oil prices rose again in early Asian trade on Wednesday after gaining over 1 percent in the previous session. This is as markets worried about a supply shortage after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year. Take a look at the details here. Oil prices gained for a second day Wednesday, following news that Saudi Arabia and Russia plan to extend limits on their production. A day earlier, the major producers said they would keep the voluntary curbs in place until the end of the year. Together they're cutting output by 1.3 million barrels per day. That's in addition to reductions agreed by several members of the OPEC group of oil-producing nations. The news saw international benchmark Brent Crude rise above $90 per barrel for the first time since November. Early Asian trade on Wednesday saw it tick even higher. It all comes despite fears of tight oil supplies later in the year. It's also a big blow for US President Joe Biden, who's been arguing for lower oil prices. He says they're needed to boost global growth and to stop Russia earning revenue to fund the war in Ukraine. Last year he failed in a bid to persuade the Saudis to ramp up output, with the country instead going on to announce production cuts. OPEC members say their curbs are meant to maintain market stability and pre-empt possible oversupply as the global economy sputters. Russia and the Saudis said they would review their production limits each month and could even decide to deepen them. So kids are filling classrooms across the country after their summer break. So is it time for adults too to get back to the office? Well, some major companies that allowed COVID-era remote work says yes it is. Here's a look at how workplace dynamics and the labor market have changed. Getting workers back to the office after the depth of the COVID-19 pandemic has had stops and starts. But now the CEOs of some major companies say they mean it. They say they want workers back in the office this fall or they'll face consequences. We are at a clash of contexts right now where employers again, as I said, and employees are not on the same page. That includes some companies that flourished during the early days of the pandemic. Like Amazon, whose CEO recently told U.S. employees to get on board with a policy requiring at least three days a week at a physical office location or consider working elsewhere. Zoom said last month that employees who live near an office need to be on site at least two days a week. And employees are finding the labor market is no longer tight enough to give them an upper hand. In July, the number of available jobs in the U.S. dropped to its lowest level since March 2021, according to government data. Employers who want workers back in the office cite the benefits of face-to-face conversations and collaborations. But some experts like Callie Williams-Yost, whose company has counseled others on how and where work is done for about 20 years, say this is still an experiment. In the office does not equal in person. And that's something that employers and employees have to come together and ask the question, what do we need to do and how, when and where do we do it best? So of course, with school back in session, it's not just parents spending more money on school supplies. Reports are showing teachers are also digging deeper to meet their classroom needs out of pocket. Here's a look at the impact that's creating. First of all, let's stand up. This back to school season, more than 90% of teachers are spending more of their own money on classroom supplies. That's according to the National Education Association, which is the largest teachers union in the U.S. It estimates that during the 2023-2024 academic year, teachers will spend $800 or more out of pocket. And so for teachers, that's roughly one to two paychecks every school year they're spending on buying supplies and stepping into the gap for these students. And inflation is making it harder for teachers to stretch those dollars. Most school supplies have jumped in price, with the cost of crayons, pens and pencils up nearly 19% year over year. A separate report by study.com found that nearly 70% of teachers cited persistent inflation as having a noticeable impact on their ability to afford supplies on their own this year. When notebooks are on sale at Target and I'd go buy a whole bunch of them so I'd have them so when a kid needed it, I just went to the stash that I bought. And it comes at a time when more teachers are quitting their jobs, citing low salaries and other concerns, which is worsening an ongoing teacher shortage in the U.S. In February 2023, according to the Bureau of Labor Statistics, there were nearly 150,000 more openings in public education than there were hires. With the high cost of inflation and prices, etc., teachers are concerned. And we're seeing all across the U.S. a demand for core essential school supplies. No iPhones at work because they could be collecting your data? Well, according to the Wall Street Journal, Beijing is ordering all officials in its central regime to leave foreign-made devices at home. Here's more. The orders were reportedly given out in recent weeks, but it wasn't clear how widespread they were. There was no immediate response from Chinese officials or Apple. If confirmed, the new move would mark another escalation of U.S.-China tensions, which often focus on tech. Washington has already imposed strict controls on the export of cutting-edge chips to China, while Beijing has restricted shipments from firms like Boeing. It also wouldn't be the first time that China has cracked down on high-profile foreign technology it deems suspicious. Back in 2021, some officials were reportedly banned from driving Tesla cars onto government compounds and other sensitive facilities. That was according to Reuters sources. Security services were said to be concerned that the many cameras fitted to the cars could be used for espionage. And China is also considering placing limits on screen time for kids and teenagers in a bid to curb Internet addiction and cultivate, quote, good morality. All devices would be required to have a built-in minor mode, which would restrict screen time based on age. Here's more on the proposed rules and reactions to them. It's an all too familiar scene. A child begs his mom for one more minute on her phone, a daily battle over devices. China's answer, minor mode, a proposed law to order tech giants to limit children's screen time and shut off apps. For one tired parent, the proposed rules would be a relief. This would be wonderful if it were true. There would be less anger between us, mother and son. You just can't keep his phone out of his hands. Under the new mode, children under 18 will get a maximum of two hours on smartphones per day and will be locked out overnight. But Beijing's top down approach has its critics. The broader worry I have is that China, under the current leadership, is imposing a very strict cultural moralism on their citizens, which is not going to be necessarily helpful for their personal growth or for the future of the Chinese economy. As part of China's broader digital crackdown, minors are already banned from gaming on weekdays. Social media apps have time limits, and some parents ship their children off to boot camps to kick Internet addiction. Zhang Taizhang, who was sent to one of these camps at 16, says Beijing's latest rules won't work. With all those structural changes, limiting children's time on video game won't change anything for the addiction. If they find a way to create a more meaningful space for children to spend their time together and have their parents relax from the work, the situation would be much better. Children are also finding ways around Beijing's rules. This 10-year-old explains. Some kids use their parents' ID to log in. They never put their phones down. They'll look at it until the battery runs out. The new guidelines order Internet providers to highlight socialist and patriotic content and promote family values. This mom hopes the rules will also mean more outdoor play. It takes away from your time to play, exercise and read. It takes away from your time to do more interesting things. But her son says parents need to lead by example. It's not easy to control myself, but adults can't either. Don't speak about us adults. Speak about yourself. A battle over screen time that's far from over. And our final China story today. Country Garden property developer has avoided a default and it has made interest payments on two U.S. dollar bonds just as the grace period was due to end on Tuesday. This is according to a person close to the company. And this is giving relief for the embattled developer and crisis hit Chinese property sector. Here are the details. Country Garden appears to have dodged default again. A Reuters source says the troubled Chinese developer has made payments on two dollar bonds just in time. Country Garden had failed to make the scheduled payments early last month, but had a 30-day grace period that was due to expire Tuesday. The amounts involved were modest by corporate standards, about $22.5 million. That failure to pay would have added to jitters over China's battered property sector. It accounts for about a quarter of the country's economy, making it critical to hopes for revived growth. Country Garden did not respond to a request for comment on the latest report. Its shares were down around 1% by mid-afternoon, despite news of the debt payment. Last week the company won approval from creditors to extend payments on a major bond. It had earlier missed two interest payments, sowing concern that it was in trouble. That alarmed investors, since Country Garden had previously been considered more stable than some rivals. Broader concern over China's economy remains high. Data out Tuesday showed services activity expanding at its slowest pace in eight months during August.