Jessica Riedl
@jessicabriedl.bsky.social
Sr. Fellow @ManhattanInst. Past: Sen. Portman chief economist (2011-17), DC think tanker (2001-11), budget policy @ 4 prez campaigns. Independent. Formerly Brian Riedl. Views mine.🏳️🌈
Wait - Didn't DOGE drastically cut deficits in the second of half of 2025?
Haha, you're funny. The only evidence of DOGE savings is a $12 billion reduction in State Dept & foreign aid funding. And the IRS layoffs will cost more money than that in tax evasion and fewer audits.
Haha, you're funny. The only evidence of DOGE savings is a $12 billion reduction in State Dept & foreign aid funding. And the IRS layoffs will cost more money than that in tax evasion and fewer audits.
November 4, 2025 at 3:43 AM
Wait - Didn't DOGE drastically cut deficits in the second of half of 2025?
Haha, you're funny. The only evidence of DOGE savings is a $12 billion reduction in State Dept & foreign aid funding. And the IRS layoffs will cost more money than that in tax evasion and fewer audits.
Haha, you're funny. The only evidence of DOGE savings is a $12 billion reduction in State Dept & foreign aid funding. And the IRS layoffs will cost more money than that in tax evasion and fewer audits.
That leaves $110 billion in higher revenues from tariffs in the second half of 2025. That is real - but also not guaranteed to last due to the courts, policy changes, and revenues lost to Americans switching out of imports. And its far smaller than the ballooning OBBBA cost.
November 4, 2025 at 3:43 AM
That leaves $110 billion in higher revenues from tariffs in the second half of 2025. That is real - but also not guaranteed to last due to the courts, policy changes, and revenues lost to Americans switching out of imports. And its far smaller than the ballooning OBBBA cost.
Yes, the 2025-2H deficits were smaller than the 2H deficits in 2023 & 2024. That's also an accounting timing issue - the govt "booked" several years of OBBBA student loan savings in August & Sept. They didn't achieve the savings, they just counted the NPV ahead of time.
November 4, 2025 at 3:43 AM
Yes, the 2025-2H deficits were smaller than the 2H deficits in 2023 & 2024. That's also an accounting timing issue - the govt "booked" several years of OBBBA student loan savings in August & Sept. They didn't achieve the savings, they just counted the NPV ahead of time.
The problem? Monthly deficits *always* shrink in the second half of the fiscal year because the later April-Sept period includes big revenues from the April 15th tax deadline, and 3 of the 4 quarterly corporate tax due dates. Falling deficits are due to tax due dates, not policy.
November 4, 2025 at 3:43 AM
The problem? Monthly deficits *always* shrink in the second half of the fiscal year because the later April-Sept period includes big revenues from the April 15th tax deadline, and 3 of the 4 quarterly corporate tax due dates. Falling deficits are due to tax due dates, not policy.
It's a lazy gimmick to think we can keep cutting taxes and expanding spending and just pay for it by forcing the Fed to make government borrowing nearly free.
Politicians need to stop looking for easy, fake solutions and make the tough decisions on deficits. (/F)
Politicians need to stop looking for easy, fake solutions and make the tough decisions on deficits. (/F)
September 23, 2025 at 4:36 PM
It's a lazy gimmick to think we can keep cutting taxes and expanding spending and just pay for it by forcing the Fed to make government borrowing nearly free.
Politicians need to stop looking for easy, fake solutions and make the tough decisions on deficits. (/F)
Politicians need to stop looking for easy, fake solutions and make the tough decisions on deficits. (/F)
Overall, fiscal dominance is a dangerous consequence to soaring debt - it paralyzes the Federal Reserve and kills its ability to slow inflation and stabilize the economy. We saw this after World War II.
September 23, 2025 at 4:36 PM
Overall, fiscal dominance is a dangerous consequence to soaring debt - it paralyzes the Federal Reserve and kills its ability to slow inflation and stabilize the economy. We saw this after World War II.
If we want lower interest rates on the debt, back in the 2010s the Treasury missed the opportunitiy to lock more of its debt into 2-3% rates for 30 years. Some of us were screaming back then to do this.
September 23, 2025 at 4:36 PM
If we want lower interest rates on the debt, back in the 2010s the Treasury missed the opportunitiy to lock more of its debt into 2-3% rates for 30 years. Some of us were screaming back then to do this.
In fact, inflationary cuts in the fed funds rate may raise - not lower - long-term interest rates.
Thus, I estimate even a *full-point* cut in the Fed funds rate would save maybe $44 billion next year. White House OMB data shows even less savings. That's out of a $7T budget.
Thus, I estimate even a *full-point* cut in the Fed funds rate would save maybe $44 billion next year. White House OMB data shows even less savings. That's out of a $7T budget.
September 23, 2025 at 4:36 PM
In fact, inflationary cuts in the fed funds rate may raise - not lower - long-term interest rates.
Thus, I estimate even a *full-point* cut in the Fed funds rate would save maybe $44 billion next year. White House OMB data shows even less savings. That's out of a $7T budget.
Thus, I estimate even a *full-point* cut in the Fed funds rate would save maybe $44 billion next year. White House OMB data shows even less savings. That's out of a $7T budget.
$9 trillion of the federal debt will roll over in the next year, plus $2 trillion in new borrowing equals $11 trillion subject to new interest rates.
Also, the market determines the interest rate paid by the Treasury on its debt, and the Fed Funds rate has limited impact there.
Also, the market determines the interest rate paid by the Treasury on its debt, and the Fed Funds rate has limited impact there.
September 23, 2025 at 4:36 PM
$9 trillion of the federal debt will roll over in the next year, plus $2 trillion in new borrowing equals $11 trillion subject to new interest rates.
Also, the market determines the interest rate paid by the Treasury on its debt, and the Fed Funds rate has limited impact there.
Also, the market determines the interest rate paid by the Treasury on its debt, and the Fed Funds rate has limited impact there.
First, yes, interest costs are burying the budget.
2021 - $352 billion
2025 - $1 trillion (approx)
2035 - $2 trillion (projected)
Interest has soared past Medicaid, defense, and Medicare to become the second-biggest item in the federal budget.
2021 - $352 billion
2025 - $1 trillion (approx)
2035 - $2 trillion (projected)
Interest has soared past Medicaid, defense, and Medicare to become the second-biggest item in the federal budget.
September 23, 2025 at 4:36 PM
First, yes, interest costs are burying the budget.
2021 - $352 billion
2025 - $1 trillion (approx)
2035 - $2 trillion (projected)
Interest has soared past Medicaid, defense, and Medicare to become the second-biggest item in the federal budget.
2021 - $352 billion
2025 - $1 trillion (approx)
2035 - $2 trillion (projected)
Interest has soared past Medicaid, defense, and Medicare to become the second-biggest item in the federal budget.
Trump campaigned on a trade war and immigration crackdown. And farm-heavy counties still gave him 78% of the vote.
Sorry guys, you voted for this. Enjoy the consequences!
Sorry guys, you voted for this. Enjoy the consequences!
September 20, 2025 at 4:57 PM
Trump campaigned on a trade war and immigration crackdown. And farm-heavy counties still gave him 78% of the vote.
Sorry guys, you voted for this. Enjoy the consequences!
Sorry guys, you voted for this. Enjoy the consequences!
America has a longer leash than France and the U.K. because were a huge, powerful economy and the world's reserve currency. But eventually, the laws of math and economics always win, and the chaos of France and Britain will head our way unless we get out ahead and reform.
September 17, 2025 at 9:36 PM
America has a longer leash than France and the U.K. because were a huge, powerful economy and the world's reserve currency. But eventually, the laws of math and economics always win, and the chaos of France and Britain will head our way unless we get out ahead and reform.
Third, the last hope was that the resulting budget deficits could at least be funded with low interest rates.
Instead, interest costs have tripled to $1 trillion and are the 2nd largest budget item after Social Security - and may double again within a decade. So even more debt.
Instead, interest costs have tripled to $1 trillion and are the 2nd largest budget item after Social Security - and may double again within a decade. So even more debt.
September 17, 2025 at 9:36 PM
Third, the last hope was that the resulting budget deficits could at least be funded with low interest rates.
Instead, interest costs have tripled to $1 trillion and are the 2nd largest budget item after Social Security - and may double again within a decade. So even more debt.
Instead, interest costs have tripled to $1 trillion and are the 2nd largest budget item after Social Security - and may double again within a decade. So even more debt.
Second, retiring boomers and low fertility rates (and likely immigration limits) are strangling long-term economic growth by limiting the number of workers.
It means all growth must come from labor productivity, which itself is not great.
It means all growth must come from labor productivity, which itself is not great.
September 17, 2025 at 9:36 PM
Second, retiring boomers and low fertility rates (and likely immigration limits) are strangling long-term economic growth by limiting the number of workers.
It means all growth must come from labor productivity, which itself is not great.
It means all growth must come from labor productivity, which itself is not great.
Which brings us to the U.S., and our deficits headed towards $4 trillion within a decade and as high as 250% of GDP within three decades.
First, the demographic challenge is raising senior benefit costs while limiting taxpaying workers.
First, the demographic challenge is raising senior benefit costs while limiting taxpaying workers.
September 17, 2025 at 9:36 PM
Which brings us to the U.S., and our deficits headed towards $4 trillion within a decade and as high as 250% of GDP within three decades.
First, the demographic challenge is raising senior benefit costs while limiting taxpaying workers.
First, the demographic challenge is raising senior benefit costs while limiting taxpaying workers.
Surging debt recently collapsed the French government, which also had its debt downgraded.
Same issues:
- Aging population and low fertility rates slow economic economic growth & tax revenues.
- Senior benefit costs soar.
- Resulting deficits worsened by rising interest rates.
Same issues:
- Aging population and low fertility rates slow economic economic growth & tax revenues.
- Senior benefit costs soar.
- Resulting deficits worsened by rising interest rates.
September 17, 2025 at 9:36 PM
Surging debt recently collapsed the French government, which also had its debt downgraded.
Same issues:
- Aging population and low fertility rates slow economic economic growth & tax revenues.
- Senior benefit costs soar.
- Resulting deficits worsened by rising interest rates.
Same issues:
- Aging population and low fertility rates slow economic economic growth & tax revenues.
- Senior benefit costs soar.
- Resulting deficits worsened by rising interest rates.
The U.K. is in deep trouble, and after last year's tax hikes were plowed into new spending, the deficit continued growing amid calls for even larger tax hikes.
September 17, 2025 at 9:36 PM
The U.K. is in deep trouble, and after last year's tax hikes were plowed into new spending, the deficit continued growing amid calls for even larger tax hikes.
Finally, impoundment may not fix deficits. Presidents like to reward their voters, not cut them. DOGE just targeted low-cost cultural totems that MAGA hates.
Moreover, a president could acquire corresponding power to unilaterally *add* spending in this post-constitutional world.
Moreover, a president could acquire corresponding power to unilaterally *add* spending in this post-constitutional world.
August 30, 2025 at 1:16 AM
Finally, impoundment may not fix deficits. Presidents like to reward their voters, not cut them. DOGE just targeted low-cost cultural totems that MAGA hates.
Moreover, a president could acquire corresponding power to unilaterally *add* spending in this post-constitutional world.
Moreover, a president could acquire corresponding power to unilaterally *add* spending in this post-constitutional world.
Second, the chaos. Imagine a president gutting Social Security because he was heckled at an AARP event. Or declaring that districts electing Democrats next year will lose all govt. benefits. Presidential elections would become elect-your-4year-dictator exercises for much of govt.
August 30, 2025 at 1:16 AM
Second, the chaos. Imagine a president gutting Social Security because he was heckled at an AARP event. Or declaring that districts electing Democrats next year will lose all govt. benefits. Presidential elections would become elect-your-4year-dictator exercises for much of govt.
From law to economics: Why shouldn't a president have impoundment powers? We have $2 trillion deficits and a lot of waste.
First, because it essentially removes Congressional representation from the operation of govt programs, giving the president near-dictatorial powers over them.
First, because it essentially removes Congressional representation from the operation of govt programs, giving the president near-dictatorial powers over them.
August 30, 2025 at 1:16 AM
From law to economics: Why shouldn't a president have impoundment powers? We have $2 trillion deficits and a lot of waste.
First, because it essentially removes Congressional representation from the operation of govt programs, giving the president near-dictatorial powers over them.
First, because it essentially removes Congressional representation from the operation of govt programs, giving the president near-dictatorial powers over them.
The White House's legal case is that impoundment is legal because:
1) As chief executive, the president has wide discretion over which laws to follow or ignore.
2) Trump was elected with a mandate to cut spending, which supercedes any legal limits.
Both arguments are absurd.
1) As chief executive, the president has wide discretion over which laws to follow or ignore.
2) Trump was elected with a mandate to cut spending, which supercedes any legal limits.
Both arguments are absurd.
August 30, 2025 at 1:16 AM
The White House's legal case is that impoundment is legal because:
1) As chief executive, the president has wide discretion over which laws to follow or ignore.
2) Trump was elected with a mandate to cut spending, which supercedes any legal limits.
Both arguments are absurd.
1) As chief executive, the president has wide discretion over which laws to follow or ignore.
2) Trump was elected with a mandate to cut spending, which supercedes any legal limits.
Both arguments are absurd.
Yet Trump promised to aggressively impound, and DOGE and several agencies have done so. They even took down a public spending database to hide what they were doing from Congress and the public. The courts forced them to restore it online.
August 30, 2025 at 1:16 AM
Yet Trump promised to aggressively impound, and DOGE and several agencies have done so. They even took down a public spending database to hide what they were doing from Congress and the public. The courts forced them to restore it online.
Impoundment is wildly unconstitutional, as even Scalia & Rehnquist long confirmed. When Nixon claimed full impoundment powers in 1973, SCOTUS shot him down 9-0, and Congress passed a statutory ban on top of the constitutional ban.
August 30, 2025 at 1:16 AM
Impoundment is wildly unconstitutional, as even Scalia & Rehnquist long confirmed. When Nixon claimed full impoundment powers in 1973, SCOTUS shot him down 9-0, and Congress passed a statutory ban on top of the constitutional ban.
Yes, the soaring debt is a serious problem that requires a serious solution. But tariffs are among the least effective tax increases because they produce more economic-damage-per-dollar-raised than most other taxes. There are better ways. (/F)
July 30, 2025 at 4:29 PM
Yes, the soaring debt is a serious problem that requires a serious solution. But tariffs are among the least effective tax increases because they produce more economic-damage-per-dollar-raised than most other taxes. There are better ways. (/F)
Moreover, trade wars harm economic growth, which in turn reduces income, payroll, & corporate tax revenues.
And much of the net tariff revenues that do survive will likely once again bail out industries (like agriculture) hit by foreign retaliation. Leaving perhaps $800B/decade.
And much of the net tariff revenues that do survive will likely once again bail out industries (like agriculture) hit by foreign retaliation. Leaving perhaps $800B/decade.
July 30, 2025 at 4:29 PM
Moreover, trade wars harm economic growth, which in turn reduces income, payroll, & corporate tax revenues.
And much of the net tariff revenues that do survive will likely once again bail out industries (like agriculture) hit by foreign retaliation. Leaving perhaps $800B/decade.
And much of the net tariff revenues that do survive will likely once again bail out industries (like agriculture) hit by foreign retaliation. Leaving perhaps $800B/decade.