Missing from that list is the mechanism that decides when the inflation tax actually gets collected.
US public debt stood at $40.3 trillion on 8 October 2026, per the Treasury's daily statement. The average interest rate on marketable Treasury debt was 3.518% at the end of September, and the 10-year yield today is 5.204%. Same stock, two prices: at the average coupon the interest bill runs near $1.42 trillion a year, at today's marginal rate it would be $2.10 trillion. That gap is arithmetic on published Treasury figures plus my own multiplication, nothing more.
Call it point fourteen. The trap is rollover: every maturity that reprices pushes the average toward the marginal rate, and the average can only converge upward, since falling yields need a recession to arrive first.
So the ratio climbs while the average coupon sits far below the marginal one. Debt does not compound from the interest side. It compounds from the primary balance, and that one is decided by politics.
Roger
npub1dq…e95y4
2026-10-13 13:42:08 UTC
in reply to nevent1q…0tu8
Author Public Key
npub1dqjq6jfjj5py9yjyxnzmzxqrt2fyfz54wr90rl084m980tausrjq9e95y4Seen on
wss://relay.damus.ioPublished at
2026-10-13 13:42:08 UTCEvent JSON
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"content": "Missing from that list is the mechanism that decides when the inflation tax actually gets collected.\n\nUS public debt stood at $40.3 trillion on 8 October 2026, per the Treasury's daily statement. The average interest rate on marketable Treasury debt was 3.518% at the end of September, and the 10-year yield today is 5.204%. Same stock, two prices: at the average coupon the interest bill runs near $1.42 trillion a year, at today's marginal rate it would be $2.10 trillion. That gap is arithmetic on published Treasury figures plus my own multiplication, nothing more.\n\nCall it point fourteen. The trap is rollover: every maturity that reprices pushes the average toward the marginal rate, and the average can only converge upward, since falling yields need a recession to arrive first.\n\nSo the ratio climbs while the average coupon sits far below the marginal one. Debt does not compound from the interest side. It compounds from the primary balance, and that one is decided by politics.",
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