Author | Lightnews

Jessica Riedl

@jessicabriedl.bsky.social

8.2K followers 190 following 360 posts

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.🏳️‍🌈

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Jessica Riedl @jessicabriedl.bsky.social · Nov 21

Slowly migrating from toxic Twitter (@Brian_Riedl). I post:
-Rapid-response (right of center) economic policy from a longtime DC policy veteran.
-So many charts – budget, spending, taxes, deficits.
-Contempt for both parties.
-Social libertarianism, tolerance, & civility.
-Wisconsin sports rants.

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Reposted by Jessica Riedl

Julian Sanchez @normative.bsky.social · 4d

As always, it's appalling at the same time it's so cheap, tawdry, and embarrassing. What a pathetic, shabby little gangster.

Aaron Rupar @atrupar.com · 4d

Trump on Mamdani: "He should be very nice to me. He's off to a bad start. I think it's a very dangerous statement for him to make."

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Jessica Riedl @jessicabriedl.bsky.social · 6d

So, no, there is no deficit reduction miracle. DOGE, tariffs, oil & gas revenues - all were supposed to balance the budget and pay off the debt.

Instead, big tax cuts and spending hikes pushed projected deficits towards $3T-$4T within a decade. Ignore the spin, watch the data.

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Jessica Riedl @jessicabriedl.bsky.social · 6d

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.

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Jessica Riedl @jessicabriedl.bsky.social · 6d

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.

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Jessica Riedl @jessicabriedl.bsky.social · 6d

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.

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Jessica Riedl @jessicabriedl.bsky.social · 6d

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.

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Jessica Riedl @jessicabriedl.bsky.social · 6d

Secretary Bessent brags that deficits fell from $1,307 billion in the first half of FY 2025 (Oct-Mar) down to $468 billion in the second half of the year (Apr-Sept).

He credits Trump's aggressive savings policies.

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Jessica Riedl @jessicabriedl.bsky.social · 6d

NEW from me @thedispatchmedia.bsky.social. Secretary Bessent has proclaimed that monthly budget figures show a rapidly declining budget deficit. But he is confusing small timing shifts for major policy changes. Deficits are set to continue rising. 🧵 thedispatch.com/article/defi...

Scott Bessent Is Wrong About Deficit Reduction

There are no quick fixes or easy solutions for trillion-dollar deficits.

thedispatch.com

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Jessica Riedl @jessicabriedl.bsky.social · 24d

Yes, the final cost will be less than $20 billion (depending on what we do with the pesos and whether we can get full value dollars back), but even a $5 billion final cost could have saved millions of lives in Africa. Seems a higher priority to me.

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Jessica Riedl @jessicabriedl.bsky.social · 24d

I'm trying to figure out how sending $7 billion to Africa to save 20 million lives from HIV (many of whom are kids) is an outrage (America First! We can't afford it) ... yet somehow sending $20 billion to Argentina is affordable, wise, and responsible.

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Reposted by Jessica Riedl

Aaron Rupar @atrupar.com · Sep 26

this shit would be a bit much for news anchors in Pyongyang

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Jessica Riedl @jessicabriedl.bsky.social · Sep 23

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)

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Jessica Riedl @jessicabriedl.bsky.social · Sep 23

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 23

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 23

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 23

$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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 23

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 23

NEW from me. Trump wants to take over the Federal Reserve and lower interest rates in part because he believes it will cut federal budget interest costs by "$1 Trillion per year."

In @thedispatchmedia.bsky.social, I show that fiscal dominance would NOT reduce interest costs very much. 🧵

Trump Can’t Fix the Deficit by Attacking the Federal Reserve

The president claims lower interest rates would save us $1 trillion annually. He’s wrong.

thedispatch.com

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Jessica Riedl @jessicabriedl.bsky.social · Sep 20

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!

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Jessica Riedl @jessicabriedl.bsky.social · Sep 17

(And before you shout "easy, just the tax rich!", watch the video below. It can save some money, but nearly enough).

bsky.app/profile/jess...

Jessica Riedl @jessicabriedl.bsky.social · Sep 10

NEW from me. My new video for @reason.com says fine, tax the rich, but recognize that it cannot eliminate more than a small fraction of the soaring budget deficits. And no, those old 91% tax rates and the European tax systems do not prove otherwise.

www.youtube.com/watch?v=o0x1...

The Uselessness of Taxing the Rich

YouTube video by ReasonTV

www.youtube.com

Jessica Riedl @jessicabriedl.bsky.social · Sep 17

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 17

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 17

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 17

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.

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Jessica Riedl @jessicabriedl.bsky.social · Sep 17

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.

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