Shock: Deficit headed to $3 trillion, to consume 75% of all tax revenue

Riedl’s report, shared with, is a blunt assessment of the nation’s fiscal situation and it includes an equally blunt list of solutions starting with cuts to spending and tax increases.: Act fast, or the result will be massive tax hikes in the future to keep Washington afloat.He writes in the summary, “Annual budget deficits doubled to $2 trillion over 2022–23 and are headed toward $3 trillion a decade from now.

The summary continues, “At that point, interest costs could consume half to three-quarters of all federal tax revenues. Unless reforms are enacted, Washington’s escalating borrowing demands will come to overwhelm the capacity of financial markets to supply this much lending at plausible interest rates. When that event occurs, or even approaches, interest rates will soar and the federal government will not be able to pay its bills, with dire consequences for the U.S. economy.

The report continues, “The only decision is whether Washington gradually imposes savings proposals on its own terms, or whether it waits for a debt crisis to impose much more drastic and painful savings reforms.”SEE THE LATEST POLITICAL NEWS AND BUZZ FROM WASHINGTON SECRETS “If lawmakers wait another five to 10 years, they will likely have missed the window on entitlement reform; and tax increases, including a VAT of 10%–15%, will become overwhelmingly likely to avoid a debt spiral,” he wrote, adding, “Conservatives can either: 1) concede 2% of GDP in limited taxes now, as part of a grand deal with fundamental spending reform; or 2) wait 10 years and end up with little to no spending savings and a European-size VAT.

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