They now found themselves in a $40 Billion dollar deficit.

Now your $1800/yr cash flow turns into a $1800 deficit.

Unfortunately, one of the Sellers is now trying to back out of the deal which will lead to a $235k deficit to my "equal an up" requirement.

I think the first thing you need to determine is how long you can absorb the cash flow deficit and maintain adequate reserves.

Mortgage applications are way high.Also consider these facts:  the Millennials are saddled with incredibly high debt, both personal (college and credit cards) and inherited debt (printing worthless money to cover the government's deficit spending).Anyone claiming to know the direction or pace of events will probably lie to you about other stuff, too.So I tell my clients, "These are strange times, and no one can predict the future with any certainty. 

But when they put trillions more dollars on their balance sheet, won’t they have to raise interest rates in the next couple of years to try to bring down this deficit?

Cities & towns around the United States are considering an increase in property taxes to make up for budget deficits as a result of the pandemic.

Or you can pay the deficit out of pocket and your payment will stay the same.

"One thing to remember is that the Politicians that are spending all the Money without any intentions to ever pay the Debt"I think once they do this and the environment is right, then they'll use the deficit as an excuse for more taxes.  

The only commonality between all the municipalities that have these higher taxes is that: (1) they are all populous areas; and (2) they have histrionically struggled with severe budget deficits.