alt Hacker NewsIf e.g. taxes are raised, and GDP decreases, it is theoretically possible that net revenues decrease even though tax rates have increased. Or, revenues may increase but the debt to GDP ratio still increases (because the lower GDP) and borrowing costs increase as a result.
Note that this means, to me, we need to get our shit together sooner instead of later. A little austerity now may prevent outright default later when significant austerity is forced.
The most effective way is likely not broad-based cuts but targeted cuts to old-age spending via means-testing to induce liquidation of 401(k)s or other savings or tangible property to pay for their own care. I feel the longer (and slower) this trainwreck proceeds, the more likely this outcome is palatable. Roughly 52% of retirees have 250k or more in savings [1]. It is far preferable to drawdown those prior to either cutting benefits or raising taxes.
[1] https://www.aarp.org/money/retirement/peak-boomer-readiness/