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. joegibbs · 1790823687 · focus · HN ↗
    There's this perception that the majority of US government spending is on the military which is completely untrue.
    Defence is only 12% of the US federal budget - what are you going to cut it to? It's not going to solve the issue even if it's abolished. Over the last 10 years health, Medicare and Social Security have grown 103%, 83% and 78% respectively for an increase of $1.64 trillion to $3.55t vs a $916b on defence. With an aging population it's only going to cost more and more over time, you can't continue to put higher taxes on a shrinking share of productive population to care for more and more unproductive retirees under any economic system.
    toomuchtodo · 1790824064 · focus · HN ↗
    Of course those programs grow when people get old, that’s when they grow! I suppose the federal government should’ve invested in investments to increase productivity to support a rapidly aging population instead of using cheap debt for inefficient, unnecessary non mandatory spending (tax cuts and military spending).
    > you can't continue to put higher taxes on a shrinking share of productive population to care for more and more unproductive retirees under any economic system.
    Start at the top with very high marginal tax rates for the wealthiest, work your way down. The wealth exists, tax it.
    <a href="https://en.wikipedia.org/wiki/List_of_wealthiest_Americans_by_net_worth" rel="nofollow">https://en.wikipedia.org/wiki/List_of_wealthiest_Americans_b...
    <a href="https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/" rel="nofollow">https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
    (The top 10% of U.S. households own roughly 67% to 68% of the total household wealth in the United States, the vast majority of which are securities)
    what · 1790824866 · focus · HN ↗
    Raising the income tax rates aren’t going to help though. The ultra wealthy you want to tax have (basically) no income to tax. Are you proposing to institute a wealth tax?
    toomuchtodo · 1790825145 · focus · HN ↗
    If necessary, yes. Whatever form is necessary to effectuate the target outcome. We tax real estate, real estate is just another form of asset and wealth (with a similar liquidity profile to private equity). We can do the same with securities, equity (public or private), etc.
    what · 1790826107 · focus · HN ↗
    We don’t really tax real estate. That’s why all the old farts pay $1000/year in property taxes on a home that’s worth millions. Do you propose taxing them on the actual value of their homes?
    toomuchtodo · 1790826169 · focus · HN ↗
    > We don’t really tax real estate.
    This is not a serious argument based on total property tax collected across all 50 states on an annual basis (~$2T) [1]. Federal government spends ~$7T/year against $2.4T in personal income tax, $1.7T in payroll tax, and $530B in corporate income tax (~$4.9T in revenue) [2].
    Could we tax real estate more? I’m sure, not opposed based on fair valuations and implementation details. We should start with securities first imho, as we already tax real estate today. Conveniently, the top 10% of households own 93% of US equities. US GDP is ~$32T annually.
    [1] <a href="https://www.nahb.org/blog/2025/03/state-local-property-tax-collection-2024" rel="nofollow">https://www.nahb.org/blog/2025/03/state-local-property-tax-c...
    [2] <a href="https://usafacts.org/government-spending/" rel="nofollow">https://usafacts.org/government-spending/
    what · 1790904361 · focus · HN ↗
    What? Your numbers are way off. You didn’t read your source, the $2T is total local/state tax revenue, not property taxes.
    Also, no we shouldn’t tax securities in a wealth tax scheme. We already tax them when you actually realize a profit or loss. Should we tax the value of your 401k?
    atmavatar · 1790827475 · focus · HN ↗
    One thing that would capture tax revenue from the wealthy and eliminate a rather large tax loophole would be to automatically realize gains on stocks used as collateral for loans.
    khriss · 1790837025 · focus · HN ↗
    edit: formatting
    > Are you proposing to institute a wealth tax?
    Ideally, but failing that raise the estate tax to 90% for estates over the current exemption limit of $15 million and eliminate all trust loopholes.
    The billionaires would be able to enjoy their money in their lifetimes and still ensure that their children are taken care of in their lifetimes all while paying their fair share to society upon death.

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