Thread

10-year Treasury yield climbs above 5.3% to a level not seen in 24 years

122 points · 193 comments · kaycebasques

missedthecue · 1790820728 · focus · HN ↗
In 2026, entitlement spending + interest expense will be over 100% of federal tax revenue.
That's before the military, foreign aid, and everything that starts with "Department of"
1. toomuchtodo · 1790820989 · focus · HN ↗
  Yeah, cut the $1T/year in defense spending and raise taxes to pay down the debt (to cut $1T/year in interest expenses) and balance the budget. Entitlements remain because workers are entitled to those benefits they worked for. The same workers the wealthiest need to suck $5T+ a year of profit out of the economy.
  We used to have 94% top tax bracket rate at one point, and higher tax rates in general. We’ll find the will to raise taxes as soon as the bond market compels the spineless in Congress to find the will (as the cost of debt continues to rise into the future), because you cannot deceive the bond market.
  <a href="https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/" rel="nofollow">https://taxfoundation.org/data/all/federal/historical-income...
  <a href="https://www.axios.com/2026/09/27/rates-borrowing-yields-fiscal" rel="nofollow">https://www.axios.com/2026/09/27/rates-borrowing-yields-fisc...
  - In projections that the Congressional Budget Office produced last February, net interest costs are already at $1 trillion this year and on track to reach $2 trillion by 2035, meaning that much of federal spending is needed just to service old bills.
  - But those projections assumed 10-year Treasury yields were in the ballpark of 4.3%. They're now nearly a full percentage point higher than that.
  - In startling numbers that CBO released this week, in a scenario in which interest rates were 1 percentage point higher than its baseline, debt held by the public would grow to 222% of GDP in 2056, 47 percentage points higher than the baseline.
  <a href="https://www.cbo.gov/publication/62758" rel="nofollow">https://www.cbo.gov/publication/62758
  1. zeroonetwothree · 1790823007 · focus · HN ↗
    It’s essentially impossible to balance the budget without cutting entitlements as the comment you are replying to suggests.
    toomuchtodo · 1790823088 · focus · HN ↗
    Yes, I specifically said raise taxes because many here believe spending cuts alone will solve this. It is impossible to not raise taxes based on debt load and forward mandatory spending curves. The bond market will force this to occur, like your credit card company raising your interest rate and bringing your credit limit down to your current balance.
    Taxes will go up, voluntarily or involuntarily. If we didn’t want to get here, well, should’ve never spent so frivolously on tax cuts for the wealthy and a bloated military that is unable to pass an audit. But we did, and that debt is going to have to be paid back, with interest. It’s impossible to grow out of this debt, and there are more workers than very wealthy people and their politicians.
    rickydroll · 1790823931 · focus · HN ↗
    They are called “entitlements” because we have a reasonable expectation of getting what we were promised when we agreed to pay taxes as our part of the social contract.
    If you say, “We should have invested more,” I point you to the 40% of current retirees that were not in a position to invest because their jobs didn't pay them enough above the cost of existing. And then there are any number of events, such as age discrimination, common medical issues, divorce, and bankruptcy, that destroy retirement plans.
    From what I can tell, it's not possible for the vast majority of the population to be able to save for a 20 plus year retirement.
    One of the things that keep people from saving are the activities driven by their investing in the stock market. To increase returns, "Activist investors" and private equity drive companies to shed jobs. You shed a job, you destroy a person's ability to save for retirement, which makes them more dependent on the social contract of Social Security and Medicare.
    Cutting benefits will only cause suffering. The cost will fall on society in other ways in terms of elderly homeless people filling the ERs, begging in the streets, or committing suicide. Is it time for a "Modest Proposal II"?
    digitaltrees · 1790826043 · focus · HN ↗
    Totally false. It was balanced in the 90s. Its just that raising taxes has to be part of the equation. Guess what, three successive republican administrations have lowered taxes. So maybe just roll those back.
    missedthecue · 1790835559 · focus · HN ↗
    But that's not comparable. If the tax take/GDP was the same today as it was when the budget was balanced then (19.9%), there would still be a deficit well over a trillion dollars. The US is simply spending a lot more. In terms of entitlements, certain things have changed structurally.
    For example in the year 2000, people aged over 65 were 12.4% of the U.S. population. Today, that demographic has grown dramatically to 19% of the population. That's fewer people working and paying taxes while also simultaneously drawing more from medicare and social security.
    This doesn't mean it's "impossible". But to balance the budget today without major spending cuts would require raising taxes 39%. It's just so different than it was then to make the math work out.
    khriss · 1790837163 · focus · HN ↗
    If the remaining deficit is around a trillion dollars, and we spend more than that on needless wars in the middle east, it's easy to see what to cut to balance the budget....
    tzs · 1790837850 · focus · HN ↗
    One thing to do would be get rid of the $184k cutoff on payroll tax. That would greatly extend the life of the Social Security and Medicare trust funds.
    That gives a lot more time to phase in any longer term changes to those programs.
    digitaltrees · 1790857498 · focus · HN ↗
    So raise taxes more.
    digitaltrees · 1790984256 · focus · HN ↗
    But that is because of wars and stimulus because of failed policies like bush’s push for home ownership and mortgage deregulation and Clinton’s move to deregulate banks. The policy could and should be that if emergency events happen emergency taxes are levied over time when the economy allows.
    Also not all deficits are bad. It is reasonable to borrow to invest in basic infrastructure. The return on investment from nasa and the university system and darpa to the US economy dwarf the cost of borrowing.
    ryathal · 1790867076 · focus · HN ↗
    The balance in the 90s was double counting social security surplus while also spending it as intra government debt.

Open on Hacker News to reply ↗

Unofficial Hacker News client; not affiliated with Y Combinator.