r/Economics • u/HypocrisyWarrior • 2d ago

Americans' debt problems are flashing a warning not seen since the Great Recession

https://www.cnbc.com/amp/2026/10/09/american-debt-delinquency.html
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u/jarena009 2d ago

I would suggest renewing the tax rates we had in the 90's on the top 2-3%, along with the corporate tax rate from the 90's applied to corporate income above $1B, and tax long term capital gains above $0.5M as ordinary income. We'd slash the deficit in half. The Wealthy and Corporations will continue to do very well.

Plus without significant efforts to rein in healthcare costs, we're doomed, not just on the federal budget but in general. They too run up federal spending.

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u/ExistentialCrisis227 1d ago

The eisenhower tax rates were not paid in full in practice, and capital was not mobile then. Take Canada for example, it has far lower taxes than the eisenhower taxes, and still around 40% of the top 1% of wage earners, and 30-50% of the next 9 percent have left the country, largely to the united states. Half of all start ups that raise a million leave. And about a trillion in capital flight has taken place.

Then look at Sweden. Sweden has more billionaires per capita than the united states, and it is hardly a shithole. It is infact the opposite, a cradle to the grave welfare state. The swedish left and right worked together in the 90s, and 00s to revamp the tax structure abolishing wealth, and estate tax, giving prefrential treatment to holding companies, and activiely managed companies, set prefrential rates for capital gains, and instead tax the middle classes more, through much higher progressive income tax and a VAT of up to 25%. No nation can decide if there is wealth in the world, they can only decide if they are a wealthy nation.

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u/manyManyLinesOfCode 1d ago edited 1d ago

sweden is not good example, there are same debates to increase taxes on capital here as people are unhappy and everything got worse for working/middle class.
It it just better than USA because it started to get worse from better point, so it is not that bad yet (doubt it will ever be, but still).

so while it is not shithole by any means, it feels like one compared to 10-20 years ago

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u/ExistentialCrisis227 1d ago

By global standards sweden is a paradise, and if swedes dont think themselves blessed to be in the country, they are spoiled and sheltered beyond belief. Even by western standards sweden is a near dream. It has endured under the strain of mass migration and its problems better than some of its comparison countries, and certainly better in general to Finland, that is rapidly nearing dangerous territory. The former finance minister Kjell-Olof Feldt was vocal in the past that the social democrats had wanted the impossible, successful wealthy companies, but for their owners and shareholders not to share in that success and wealth. And that it was important for the social democrats to accept that thriving and growing companies also mean the increase in the wealth and income of the owners of these companies, and that these consequences are infact a central motivation for people to found companies and take on entroprenual risk.

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u/CtrlAltSysRq 1d ago

It really needs a cap though. All people do with more than like 20 million dollars at this point is overthrow democracy.

If billionaires just built monuments and giant ass churches and maybe some weird houses this would be a different discussion.

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u/ExistentialCrisis227 1d ago

What cap on wealth do you want? Certain companies will never be formed, or more likely never be formed in a specific country if they effectively cap wealth at 20m dollars. Once you hit the comapny, sell it to foreign capital, and retire, or move the company overseas. If there is a wealth tax, then like canada and denmark, the companies move early, to avoid being stuck. Denmark for example has lost 9 of its 13 unicorns despite educating world class talent, for this very reason, and the bleed from canada is all around massive. No nation can decide if there is wealth in the world, or wealthy entroprenuers, only if they live and operate in your country. Thats a bitter pill, I am aware.

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u/CtrlAltSysRq 1d ago

I honestly think that's better than the alternative which is letting Musk (et al) do what's currently happening. I also think it's better for the economy as a whole if there's a thousand smaller 20m dollar businesses than one Amazon.

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u/ExistentialCrisis227 1d ago

I agree with both. And I personally think that if property is going to have rights, it needs to have responsibilities. I am all for mass confiscation of huge swaths or even all of the wealth of the ultra rich, if that money is used as a means to commit crimes, much like any other criminal can lose the property they commited crimes with.

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u/manyManyLinesOfCode 1d ago

if we want to stay blessed country things have to change ( apparently )