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. margalabargala · 1790821186 · focus · HN ↗
  Not sure why you're getting downvoted. I thought you were wrong, looked it up, and you're correct.
  In 2025, federal gov revenues (total, not just tax) were $5.26T: <a href="https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/" rel="nofollow">https://fiscaldata.treasury.gov/americas-finance-guide/gover...
  In 2026, entitlements plus interest is projected to cost $5.45T: <a href="https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/" rel="nofollow">https://fiscaldata.treasury.gov/americas-finance-guide/feder...
  1. JauntTrooper · 1790824298 · focus · HN ↗
    We would have to raise federal taxes by an average of at least 39% per household and on businesses =just= to balance the deficit.
    The reason the US is a comparably "low tax" country is because we're borrowing the difference.
    What worries me the most is that this is at a high point in our economic cycle, when tax collection is arguably the highest. The deficit and debt will expand significantly in the next recession.
    digitaltrees · 1790825642 · focus · HN ↗
    This is the best time to raise taxes specially because the business cycle allows it. Guess what would help reduce inflation...raising taxes.
    ethbr1 · 1790828525 · focus · HN ↗
    The modern US is a great example that maybe you should have tax and fiscal policy somewhat removed from democratic hands.
    I.e. have a Fed-like entity that gives Congress a max in spending for the current tax policy, and Congress is required by law to stay below that number
    Fixing US debt has always been politically unpopular, and it always will be.
    digitaltrees · 1790833102 · focus · HN ↗
    Checks and balances were supposed to do that. Federalism was supposed to do that. Republicans have played a 60 year strategic game really well and blocked the checks and balances. Here we are. With no way back quite frankly
    soerxpso · 1790835570 · focus · HN ↗
    In what way would checks and balances do that at all? The only branch that has any sort of leeway to pass unpopular policies is the Supreme Court, and setting budgetary constraints is far outside their purview.
    adjejmxbdjdn · 1790848712 · focus · HN ↗
    In a world where the president wasn’t politically associated with Congress (the US system It’s different from most in that the executive is not elected from the legislature), the President could theoretically demand Congress send them a balanced budget to sign, otherwise they would be responsible for the cuts.
    Unfortunately the U.S. constitution was written with the, in hindsight, naive assumption that political parties could be avoided.
    This just led to a system that has political parties but doesn’t really acknowledge their existence and therefore makes it difficult to regulate their behavior.
    imightbebatman · 1790936882 · focus · HN ↗
    Madison talked about this problem during the Virginia ratifying convention. There is no government structure that can survive bad actors. His solution was that informed voters would punish bad actors. -- We're in short supply of informed voters and accountability isn't a thing anymore.
    ethbr1 · 1790945629 · focus · HN ↗
    Punishing bad actors depends on informed voters, but in a larger population democracy it also depends on the informed voter : uninformed voter ratio staying above some value.
    The lower the ratio sinks, the less weight informed voters have, and the less intelligent the outcome gets.
    The modern party duopoly exacerbated the issue (parties mobilize uninformed voters and often actively work against informing them), but voter enfranchisement also seriously impacted.
    Universal suffrage is amazing from a human rights and ensuring everyone has political power standpoint, but troublesome when you have poor levels of universal education and ability for voters to inform themselves.
    In modern times, with modern populations (US or larger), it feels like indirect democracy might be a better answer.
    Allow voters to directly elect non-partisan voting representatives (many, so elections are hyper-local and candidates individually canvas), then pay those representatives a stipend for a few months (like jury duty) which they spend educating themselves on issues. Then have those representatives vote.
    imightbebatman · 1790946453 · focus · HN ↗
    Sorry. This is utopian. If those, let's call them electors, "educated themselves" with sources from RAND or worse, Fox/Breitbart types. Or to be non-ideologically biased about the point, communistUSA. Then they too would act as bad actors when they voted.
    At the end of the day, when all the BS gets boiled away and we are left with raw/brutal reality. -- Any group of people attempting to govern themselves will end up with the government their collective will and (i'll use the loaded term) virtue deserves. The only caveat is time.
    cindyllm · 1790946571 · focus · HN ↗
    [dead]
    HDThoreaun · 1790879803 · focus · HN ↗
    Putting fiscal policy in technocrats hands seems like a bad idea to me. Most technocrats are completely divorced from the experience of average people. Since their incentives dont align they would end up implementing bad policy thinking it was good. Tax policy could certainly work though. Most tax law is written by technocrats today, they just need a politician to champion it after its written for it to become a law.
    ethbr1 · 1790895867 · focus · HN ↗
    Imho, the way to do it is to allow the unelected technocrat body to set the general parameters (e.g. max available spending for current tax policy) while leaving the specific params (e.g. budget items) to Congress.
    Technocrat bodies seem to do okay with setting scientifically-supported, non-specific directions, that can then be decomposed into specific directions by people better connected to constituents.
    imightbebatman · 1790936687 · focus · HN ↗
    This couldn't ever work. In a crisis like 2007 the US rapidly going into deficit spending is the only thing that kept the financial system running. Have a hard cap during the next crisis and the Great Depression will start having numbers beside it. Economics is a soft science and politics isn't a science at all.
    ethbr1 · 1790941879 · focus · HN ↗
    Any economist on such a body would have seen that the post-Bear Stearns reaction in 2008 merited exceptions to fiscal policy.
    Such a body presumably would also realize that deficit spending on an average non-crisis Tuesday should be much more tightly reigned in.
    I chose the Fed as an example because, whether they're correct or not, they absolutely pivot around exceptions.
    imightbebatman · 1790944893 · focus · HN ↗
    This is precisely my point. Who decides what is and is not a crisis. Germany tried a version of what you're advocating for and recently realized it was unsustainable, and declared a crisis so they could up defense spending.
    Trump has declared crisis events no less than 20 times to justify his insane policy decisions.
    We're just playing pretend games now.
    ethbr1 · 1791076041 · focus · HN ↗
    The entire point of the Fed et al. is to remove the ability to decide what is and isn't exceptional from those who have political stakes in declaring everything exceptional.
    [deleted] · 1790940253 · focus · HN ↗
    [deleted]

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