That's before the military, foreign aid, and everything that starts with "Department of"
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.
https://taxfoundation.org/data/all/federal/historical-income...
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.
In 2025, federal gov revenues (total, not just tax) were $5.26T: https://fiscaldata.treasury.gov/americas-finance-guide/gover...
In 2026, entitlements plus interest is projected to cost $5.45T: https://fiscaldata.treasury.gov/americas-finance-guide/feder...
Stock market dynamics now are fundamentally different now compared to the last period of sustained high inflation (70s)... And they've done fantastically over the last few years of stubborn inflation.
Don't get me wrong, I want to be in that category, but still.. this is our reality. It's an interesting experiment we are running. Without external factors like global wars and climate catastrophe, could the market even crash in our current environment?
Take a look at the S&P 500 vs. the equal-weight S&P 500 over the last 6 months:
https://finance.yahoo.com/quote/ES%3DF/
https://finance.yahoo.com/quote/RSP/
The equal-weight S&P 500 has been on a steady march downwards since it became apparent in August that the Iran war was not even close to over, and is now getting close to correction territory (7% down). This is exactly what you would expect given the news. It is the opposite of what you would expect from the inflation story, which would lift the earnings of everything in the S&P 500 (which, after all, is composed of the 500 largest companies and overweights monopolies or oligopolies in broad industries).
The S&P 500, however, has been basically flat over that same time period, holding at the 7700 level. It basically has a leg down over the course of the week, and then always pumps on Friday to regain the previous level. I'm not sure if it's government intervention or irrational exuberance in a small set of AI stocks, but the divergence between the broad market and the S&P 10 is becoming increasingly noticeable.
The problem is that the level of debt overall in the US - across both private and public sector - is just astronomical. We are truly in unchartered waters, outside of a world war. There's just no model or playbook for how this should work from here forward, other than it seems very clear we will hit a point where the math stops "mathing" and that point is getting closer and closer.
As for the people that will inevitably bleat about how this is just horrible and we need to lift the cap on taxable SS income, that wouldn’t solve the core problem either unless you pair it with spending caps or cuts.
Yes because everyone paid into it and wants their money back with interest as promised? This isn’t weird.
Wild times. Maybe it's information overload, since it probably happened in the past as well. But being bombarded with implications of these changes left and right is kinda weird.
Well, it turns out that we did it with the COVID economic shocks, and for a while there was talk of a “soft landing” but that’s all but disappeared from the conversation.
> everyone had seen Japan fail to pump up its economy
Agreed about this, but I feel like everyone is watching Japan right now again. And I fear people will make wrong assumptions, given how its "economy is growing right now".
They've been subject to EU Excessive Deficit Procedures for multiple years, must bring deficit-to-GDP ratio from ~5.8% down to 3% within 3 years despite virtually no GDP growth and complete political and societal paralysis about reducing any public benefit or welfare whatsoever.
ECB will most likely get involved after 2029 to start austerity measures. You can predict how that will go over with the French public especially if Le Pen takes the presidency, which looks likely.
Very tough times ahead and the EU is facing a critical point about its future.
We have spent decades selling these billionaires government debt instead of just taxing them correctly.
People need to study this graph https://fred.stlouisfed.org/series/FYFSD and think about what changed when.
Yes, there are reasons why this isn’t working out as planned. But the idea that “Social Security is the biggest driver of spending” is not a cogent argument.
I don't have deep knowledge, other than a bunch of "pattern matchings" I've done throughout my readings, but as people get older, on average, their wants/needs change over time. Older people, especially as they get closer to retirement age, have more free time as well. Implicitly, these desires eventually bubble up into economic/political action, that's more or less unprecedented. It would be very cool to research this more in depth, but unfortunately i'm in the wrong field.
We have seen abundantly clearly that telling the truth is the worst thing you can do for your political career. The correct move is to lie, lie, lie, lie. Reality is completely irrelevant. All you need to do is tell them what they want to hear. Nothing else matters. They will not hold it against you if you break every promise you make. They'll vote for you again and in greater numbers if you ramp up the promises to even bigger lies, nevermind your track record.
valleyer•32m ago
Unlike most Trumpists, I see the the problem as a revenue issue, not expenditures; unlike many non-Trumpists, I doubt "tax the rich" is going to be enough to plug the hole.
Government healthcare payments would be a good start -- it seems likely that the amount most employees already (effectively) pay for health insurance could fund equivalent government coverage with some money left over to help pay for other government expenses.
consumer451•30m ago
valleyer•18m ago
y1n0•12m ago
But it doesn’t matter. Those historical parties have nothing in common with their namesake parties today.
valleyer•4m ago
So, I agree with your conclusion.
https://fred.stlouisfed.org/series/FYFSD
consumer451•10m ago
y1n0•15m ago
bryzaguy•7m ago
margalabargala•27m ago
Interest rates are a function of inflation and joblessness. Both of which the current administration has created via terrible (for the country; great for the family members of the administration) policies.
The terrible policies are destroying jobs and causing the prices of goods to go up, thus increasing interest rates. The administration could balance the budget, but that would not correct the interest rate problem unless they also stop enriching themselves at the expense of the rest of the country.
valleyer•15m ago
My amateur understanding is that prevailing interest rates are more directly a function of supply and demand for capital; I agree that higher prices increase demand for capital. Joblessness would seem to be correlated with lower demand; the unexpected combination of high employment and persistently low interest rates in the 2010s was a source of a lot of commentary, as I recall.
__MatrixMan__•12m ago
bshaughn•25m ago
A 5% revenue tax on the fortune 500 would get us half way there. I could not quickly get a number for total revenue of more than the fortune 500, but I would not be surprised if a 3% VAT would cover the entire deficit. We lose so much tax revenue due to all the loop holes deliberately left in the corporate tax code.
On top of that, ban stock buy backs entirely, that way more of the record breaking profits have to go to wages or other means of investing in the business.
trescenzi•21m ago
missedthecue•15m ago
Given that ~20% of that group have net income margins below 5%, how much of such a tax policy would simply be an inflationary tax on consumers? I.e., we know Walmart cannot simply pay a 5% revenue tax, that would instantly make them deeply unprofitable. So they would have to raise prices to afford the tax. And if they know Target, Kroger, Costco, and Amazon also need to pay the same 5% tax, there is less competitive pressure to eat into margin. Even with zero collusion, there is perfect information symmetry regarding the tax.
At their present 3.1% net margin, if Walmart passed a 5% gross-revenue tax entirely to consumers while all else stayed equal, prices would have to rise MORE than 5% -- about 5.44% just to preserve its existing margin. Of course, some of the tax burden likely gets shared between Walmart, its customers, supply chain, vendors etc... In a world where the Fortune 500 (Walmart) has to pay the 5% revenue tax but a supplier of some SKU (not a Fortune 500) does not pay it, I imagine Walmart would lean extra hard on them to eat some of the tax. It all seems like a very messy and inefficient tax.
On the VAT, the CBO has actually studied a 5% VAT tax and modeled that it would raise $330B. That's 16% of the current $2.1T deficit.
https://www.cbo.gov/budget-options/58637
sethops1•3m ago
https://m.youtube.com/watch?v=AmzadQE9UD4&pp=ygUKQmlsbGlvbmF...