They called it off because it was running lower on fuel than they expected - the margins are crazy thin. You can see a green burst of flame near the end, which is what happens when you run oxygen rich/fuel poor (also called "engine-rich" - iirc the green flame is copper from the engine as the oxidizer-rich mix causes it to run hot).
Starship is a lot cheaper than it looks, because they're mass manufacturing the engines. They're targeting $250k per Raptor 3. The RS-25 used on NASA's SLS/Space Shuttle costs about $100M to make currently, comparable thrust.
They don't need super heavy payloads, it seems pretty clear that they'll be able to launch even just a Falcon 9 payload in this for less than Falcon 9, because they're not throwing away the expensive upper stage.
Also, my understanding is that Starlink v3 just doesn't fit inside F9. The larger phased arrays that that enables lets them make much better use of spectrum than the v2 minis. There are lots of potential uses for larger payload volumes.
The space DC thing has been beaten to death online, with tons of very confident commentators claiming it will never happen for the reasons you've mentioned. Some counterpoints, Google just launched their first ML infra to space with their Project Suncatcher launch, and if you actually run the numbers, the radiators are smaller than the solar arrays, so obviously it's feasible to launch the radiator if it's feasible to launch the solar array to power it. Who knows if it'll make economic sense, but it seems pretty clear that it's getting harder to build DCs on the ground in the US, there's a lot of backlash against it, we just saw what it did to Abbott. Many areas don't have the spare power, and doing it in space makes solar into reliable baseload power rather than 1/8th nameplate and intermittent.
Anyway, I don't work in that industry, I've just been following along with them because I've been an investor since before Starlink was a thing, but I really think people should keep an open mind about whether SpaceX can pull off things that sound a bit nutty.
That used to be true. But now the Chinese model companies are just not training their open weight sets on cybersecurity tasks: there’s no censorship to remove, it just doesn’t have that specific ability.
Moonshot reportedly removed some training data, which dinged its cybersecurity ability somewhat, but Kimi still has pretty strong ability - they still reported >80% on their xdev-bench-hard, down from 90% before the data removal. DS 4.1 is supposedly quite good for it (85%), and Z.ai has been talking about how they're trying to improve GLM's cybersecurity abilities, so it doesn't seem like a broad trend.
The workstation edition defaults to 600 W, Max-Q to 300 W. 1M tokens/hr is 277 per second, which is roughly right for a single request at a time for a lot of models, not sure about Q3.8FN specifically, but these things scale really well to 16+ concurrents, I typically get 1-2k tps on Deepseek Flash when the cards are heavily loaded. MTP (a small network that predicts a few tokens which get checked in parallel against the full net, kind of like CPU branch prediction) makes a huge difference in single stream throughput.
We're talking about RTX Pro 6000s, local models on those are not slower than cloud models. With MTP, you're generally at 200-300 tps on one of the big MoE models in single stream in code generation (the small MTP models tend to be better at code token prediction than prose). The big cloud models are typically <100 tps.
Open source is more exciting than ever, imo. People can much more credibly customize their own software now thanks to language models, and that makes the fact that something’s open source an even more compelling feature. It also provides an alternative interface to whatever (usually rough) UI it has.
Lots of people are using locked down devices, but the higher friction alternatives just lost a lot of their friction.
Combine that with Windows getting noticeably worse and more aggressively annoying, and it might finally be The Year Of The Linux Desktop.
These excessive daily updates I get on my linux are exhausting. For example, libre office started lagging on a large document I frequent daily and I had to rollback.
We really need to reduce the fiscal/govt budget deficit. It's basically printing trillions per year, and as confidence in the soundness of the USD decreases, demanded interest rates rise, and increase the deficit further. The interest payments are already larger than the defense budget, about $1T/yr. It's an emergency at this point. The old method of raising interest rates to cool inflation isn't effective anymore with this sort of fiscal deficit, because it increases the interest payments, and effectively increases the rate of money printing, counteracting the effect of the decrease in private credit creation.
The only way to fix the budget is to fix the medical system, and that doesn't mean enacting more schemes to figure out how to pay the absurd costs, it means destroying the cost side by applying long standing anti-trust law to the entire system.
Yes, we should apply anti-trust law to the whole system, but this doesn't really pass the smell test. First, consider what proportion of medical costs is corporate profits. Maybe 5-15% as a guess? Then, excess monopoly profits would have to be a subset of this (what, 20%?). Sure, it would be nice as a one time adjustment but it's not going to fix the problem over decades.
The problem is, with the way things are right now, it's basically impossible to tell how much is profit.
Profit, for various entities, is baked in at every level, in multiple ways that are very difficult to disentangle from the actual costs without getting real auditors on the ground with access to all the data.
Some people think that the fix to the medical system is to make it more socialist and others think it should be made more capitalist. What we have right now is somewhere in the middle.
Most of hospitals are non profit. If you choose HMO insurance, its will probably be non profit as well like Kaisser. Some of big PPOs are also non profit like blue cross blue shield. Problem seems like over complicated billing and accounts receivables which leads to large administrative staff hospitals have to employee. Lack of medical professionals nurses and doctors which lead to increased salaries.
The largest expense in the medical system is caregiver wages; administrative wages are the 'foreign aid' of the medical system (very unpopular, but not a major cost-driver). Reducing doctors' and nurses' salaries is very unpopular even though the USA pays those two groups much more than any other country in the world (by almost any measure).
AMA is a literal cartel restricting supply. Most of a doctor's job can be done better by ChatGPT (or a regular individual with a 4 year degree with specialized training for that matter), so it is obvious the licensing and supply is a major issue.
But irrelevant in the big picture. Look at any medical appointment and how much you get billed for it, compare how much the doctor gets.
The doctor (and nurses and other medical professionals) are getting a small slice of the amount you had to pay. Most of it goes into overhead by grifters in the system.
But how on Earth do the numbers square with this? When our insurance company pays $20k or whatever at the hospital for a normal vaginal delivery, on a bill of $80k, I have a hard time believing that a significant portion of that is caregiver wages, the majority of the time spent there, the caregivers are focused elsewhere, and just check in periodically. Or $40k for outpatient knee surgery.
The top line bill in US medicine is almost entirely fictitious. Hospitals and insurers built a system to defraud people on percentage plans. If you're on an 80/20 plan, for example, and the bill is $100, in theory you pay $20 and your insurer pays $80.
But what actually happens is you pay $20, the insurer pays $80, and then the hospital has to remit a large block discount back to the insurer at some point (it's either the end of the quarter or year. I can't remember). I haven't looked into this in awhile, but when I did local area hospitals were discounting payments by almost 80%, meaning the insurance company actually pays $16 on that bill and the plan that's supposed to have you paying 20% of the bill actually has you paying 55.6% of what the hospital receives. Like I said, it's fraud. It may not meed the legal definition of fraud, but it's still fraud.
Are you saying the insurance company is not paying the 80% of the negotiated rate? Why would a hospital defraud people when they are non profit entities?
That's exactly what I'm saying. What they do is group all the charges together in one big number and say "Every quarter you have to give us back 80% of the total money we paid you." The fig leaf is that this is a totally separate fee, but the effect of it is you're paying over half instead of your 20%.
That's why if you're paying cash and you call the hospital up and say "I'll pay you today if you knock 50% off the total bill" they'll do it without even hesitating.
Whatever ideological team jersey we want it to wear, the root cause is that medical insurance has gone from being insurance used in case of emergency, and gone to being a middleman skimming as much as humanly possible while ghoulishly denying healthcare if it is more profitable to let a human die before they can appeal the payout decision.
The only way out of this is to remove the profit motive sparking this avarice: either nationalize the healthcare, or ban healthcare insurance and regulate hospitals so tightly that they aren't allowed to profit as a business, the executives have capped pay, and the business can't be publicly or privately traded.
The laissez-faire approach to healthcare has completely failed in the US. Given it is the wealthiest country in the world, I cannot think of a more damning result for the health insurance model.
Every medical system in the world "ghoulishly den[ies] health care" to patients. If it's not an insurance company, it's the charity providing the care or a government bureaucrat.
And the least accurate label to apply to the US health care system is "laissez-faire approach", since the government is involved in literally every decision.
> The laissez-faire approach to healthcare has completely failed in the US.
Why do you think we have a free market approach to healthcare? Why can I only sign-up once per year unless I have a QLE? Why can I contribute a certain amount to an HSA which is triple tax advantaged with an HDHP but I can't with a PPO? If I have an HDHP+HSA why can I also contribute pre-tax dollars to an FSA that is use-it-or-lose-it for dental or vision only but if I have a PPO I can have a limited purpose FSA that can be used for medical, dental, and vision? Why are there contribution limits? Or even more basic, why is healthcare tied to employment?
The reality is we don't have a free market when it comes to healthcare at all, we have a hampered market where over the years we have politically regulated it into the abomination it is today with some of the worst incentives possible. We can certainly have the debate of whether a free market or nationalized healthcare is best, they both have trade-offs, but it's fallacious to assume we have the former and discount it entirely thus leaving either more regulation or nationalization as the only alternatives. More regulation is almost certainly the worst possible option, we've been on that path since WW2.
What is the market value of your mother's morbidity and mortality? Your spouse's? Your children's? Trying to apply a market to healthcare can become macabre rather quickly.
Assuming a nationalized healthcare model, should the entire productivity of the nation be dedicated towards keeping a single person alive and healthy at the expense of every other conceivable economic activity such as building houses, growing food, manufacturing water treatment facilities, etc? Would it be macabre to deny them any amount of healthcare?
All economic systems allocate scarce resources which have alternative uses and thus rationing must always exists regardless of whether it is a free market, mercantilist, socialist, or as yet unknown economic system. Prices are a rationing mechanism within markets[1] but every other system will have its own set of one or more rationing mechanisms such as by-status, by-lot, by-need, by-survivability, etc. That necessarily means that there aren't enough resources to treat everyone for everything under all circumstances. Do you believe that all economic systems are thus macabre? If so I agree if only because life itself gives us hard choices, never utopic solutions.
[1] In terms of emergency healthcare by-need tends to be used even in market systems.
The answer to all of your questions is that if you are obscenely well off, all of these restrictions go away with enough money. Private insurance exists, or hell - just paying out of pocket. It is a free market, but only for those with enough money to pay.
The average person cannot pay. Health insurance is designed to maximize extraction of wealth from the non-wealthy, while doing just barely enough that they don't immediately get regulated away. The reason for this is greed: sure, greed drives efficiency in capitalism, but if it isn't reined in via regulation we wind up with the abomination we have today.
> More regulation is almost certainly the worst possible option, we've been on that path since WW2
We have de-regulated. In 1950, stock buybacks were illegal, the top corporate tax was 42%, and the top personal income tax was 91%. Today, companies buy back their stocks (transferring wealth to shareholders faster than dividends), top corp tax is 21%, and top income tax is 37%.
Sure, in some cases there is more regulation: factories can't dump waste into the rivers, and employers can't discriminate by race or whatever. But none of these things are the reason why healthcare has become unobtainable to many in the US.
> sure, greed drives efficiency in capitalism, but if it isn't reined in via regulation we wind up with the abomination we have today.
This is exactly where we part ways though. You specifically said "laissez-faire", i.e. "leave it alone" in French; economically this is anti-interventionist, let the markets sort themselves out without interference from government. You are saying regulation is required for the market to function or it leads to what we have today and I'm pointing out that we already have enormous quantities of regulation in healthcare. I pointed out several very easy examples to identify with but by no means is that an exhaustive list of healthcare interventions. The very thing you are advocating for, regulations, has been increasingly attempting to "fix" this market for the past 80 years and our current system exists because of it, not in spite of it. It is not a free market in any sense of the word, and doubling down on more regulation will not improve it. I am more than happy to debate an actual free market or nationalized healthcare model, but further regulating this "free" market is misdiagnosing the system we currently have and assumes the same good intentions that have failed to improve it for four generations will somehow produce better results this time.
When you're trying to analyze the failures, perhaps try to not wear any ideological jersey to begin with?
The US does not have a laissez-faire approach to healthcare. The industry has been designed on government interventions. From the financial perspective, the main dynamic is some idea that by being middlemen, health "insurance" companies will work to put pricing pressure on healthcare providers. This was fallacious when it was designed (in 80s or 90s I think), but became patently absurd when the ACA limited insurance company profits to a percentage of revenue.
What other industry do you go to buy a service from a seller, but when you ask about pricing they tell you they don't know anything, and they can't know anything, until they decide to bill you some arbitrary amount months or even years later?
The closest thing is something like auto repair [0]. But mechanics offer fixed fee straightforward services (oil change), straightforward pricing (shop rate at book hours), and written estimates - to be responsive to customers' concerns! Sure, you can drop your car off at a shop and say "fix everything, spare no expense, and call me when it's ready", but that is not how most people operate, by far.
I am definitely not going to tell you that a functioning price dynamic is sufficient for healthcare reform [1] - but it is most certainly necessary!
Single payer supposes to move that pricing dynamic onto the government, where there could be at least a modicum of responsibility. I'm not even against this - our system needs a strong push in some direction. We've currently got the worst of both worlds - centralized planning for provision, coupled with laissez faire extortion for billing (made especially powerful due to the resulting shortages).
But even with single payer, there are going to be cases that exist outside its scope, right? And unscrupulous providers claiming they provided things outside of that scope and demand to be paid directly, rather than settle for their regulated rates [2]. And so regardless what you see as the overall solution, whatever legal bases that create this post-facto-billing-shakedown need to be completely eliminated. Sending fictitious inflated bills at patients needs to be prosecuted as the straightforward attempt to defraud that it is, not trivialized as the standard operating procedure it has become.
[0] who are actually dealing with a much wider gamut of unknown unknowns!
[1] also just preempting the inevitable nonsense response about having to compare hospital prices on your phone before the ambulance arrives. ie tell me you've never significantly interacted with the healthcare system without telling me...
[2] this culture of fraud has become so embedded in the industry, I've had billing agents continue to attempt to defraud me even after confronted with a solid price limit confirmed by both Medicare guidelines and the underwriter (of a medicare advantage plan). This is about as close to single payer as one can get right now, and yet the fraud/extortion dynamic still exists.
Hot take: stop funding biomedical research. Turn the tap off from which bleeding edge but super expensive therapies emerge. People won't demand what doesn't exist.
GLP-1 treatments alone are responsible for a plurality of the rise in costs this year and next. Over $7000/per/year for a huge fraction of the population.
I guess nixing patents might have the same effect, but it'd be easier to get Republicans onboard an approach that simply cuts outlays rather than one that ruins the wet dreams of biomedical research private equity.
paying for GLP-1 is a net benefit to insurance pools, because obesity (and other uncontrolled hunger-like cravings) have very expensive downstream symptoms.
Literal business can also mean "prioritizes short-term quarterly profits" vs "invest in upfront expensive preventative care that will take years if not decades to pay off with no guarantee we'll even still be in business or that this rate-payer will still be with us"
It’s counter intuitive but totally valid. Another angle on this would be to lower the standards for clinical trials. The fact that it costs billions of dollars to run a drug trial is a key part of why everything is so expensive the FDA standards are extremely high. The result is safe drugs but it also makes the R&D market extremely skewed towards the big entrenched players. There is also no room for physicians or patients to take calculated risks. Sure it all falls into a sensible self consistent philosophy of “do no harm” but the side effects of that principle are extreme cost and actually slow innovation. In this modern era data collection should not be this expensive.
We have continuously overcorrected in the hundred years since we banned snake oil medicines.
Sure, people should know what they are taking, and they should take things that are safely manufactured and safe to use.
But, there needs to be room for a person to make informed decisions as part of their body autonomy. I personally do not want to start taking peptides because they're so new and the long term risk is unknown, but people who see the initial results and want to be human guinea pigs should be allowed to.
There really needs to be a middle ground between a decade of testing on the off-chance that 1-in-1,000,000 parents gets an upset stomach, and ordering who-knows-what research chem from a sketchy website.
Generally we should be lowering costs, but if lowering development costs results in more therapies, even if they're cheaper individually our aggregate cost trajectory could remain the same. The fundamental problem is, all our social inequities notwithstanding, we're super rich and our demand price sensitivity for healthcare is incredibly inelastic. Other rich countries throttle the introduction of new therapies at their borders to mitigate this dilemma, but because most of the therapies are coming from the US we can't do that.
When governments (or anyone) wants to sell bonds, the money has to already exist 'in the wild'. The selling of government bonds does not create new money/currency. The pool(s) of money is already out there, and when bonds are offered, the people who control the pool(s) decide whether to buy or not.
(This isn't to deny that government deficits/debt needs to be at reasonable levels.)
I was being imprecise, it's not literally making up the entire deficit with new money, though the Federal Reserve's securities did increase by $200B over the past year, and M2 money supply increased by $1.2T. A lot of the deficit is inflationary in that it adds to the financial balance sheets of the private sector, even when financed by bonds sold to non-banks. It pushes up aggregate demand even when it doesn't increase the money supply. When aggregate supply can't keep up, you get inflation.
The thing is that "inflating it away" isn't a serious long-term proposal. Suppose we were do something drastic, like target 6% intentional inflation, obviously nobody would buy bonds at 6% anymore, they'd demand at minimum 12% (because they'd lose 6% of it due to inflation). Once they demanded 12% the interest payments [on the gov debt] would shoot up well above the current 1t / year, and then the amount we'd need to inflate would again spiral up. The spiral runs away, there's no secret cheat to a free lunch.
You will find no-one who argues that our government is serious about the debt or how to pay for the unfunded programs like Medicare and Social Security.
Eh, it's an issue. We should solve it now. (We should have solved it ten years ago.) But we have a little time.
Emergency will be stagflation. Crisis would be if the Treasury couldn't sell debt.
> the old method of raising interest rates to cool inflation isn't effective anymore with this sort of fiscal deficit, because it increases the interest payments
There is no evidence of this. There might have been in Japan (in the 1980s). But Americans don't save as much as the Japanese, and the concavity of the wealth effect means that those who do don't tend to spend much more when their interest income rises.
I just don't see much political appetite for austerity/entitlement cuts/more taxes, so I don't think we're going to fix this in any orderly way.
I guess the thing that worries me most about this is how this interacts with the USD's reserve currency status - that's historically absorbed a lot of the govt's deficits and suppressed inflation. I don't see many good alternatives to it in the set of global currencies, but there's been a lot of central bank buying of gold, and I could imagine a basket of other hard capital goods maybe functioning that way. And we're seeing more rmb-denominated trade.
>There is no evidence of this. There was in Japan. But Americans don't save as much as the Japanese, and the concavity of the wealth effect means that those who do don't tend to spend much more when their interest income rises.
I believe it tends to get sunk into asset inflation? Real estate/housing being one of those, and one of the biggest inflation drivers. Also of populist unrest. Agree that it doesn't push up labor prices as much because of the distribution effect you're talking about.
Yeah, anyone talking about the dollar being replaced by RMB or something is just kind of talking out of it.
China specifically does not actually want to be the reserve currency and replace the US, a good reserve currency should be fairly liquid and they like the ability to shut down capital flows into and out of China.
The other alternatives are not great; JPY has the same debt problems as USD. EUR has the same debt problems in certain member states like France, and the fiscal/banking crossborder liquidity isn’t very good and the governance still fickle and precarious. CHF is too small.
True. I think CPI excludes mortgage interest, but in terms of real actual housing expense that people experience, it seems like it'd still cause it to rise. And as renting becomes more attractive as an alternative to buying, landlords get more pricing power.
> as renting becomes more attractive as an alternative to buying, landlords get more pricing power
You're right.
"...contractionary monetary policy increases both real and nominal rents. A 25 basis point unexpected increase in the 30-year fixed rate mortgage raises real (nominal) rents by 1.7 (1.4) percent 12-24 months following the monetary policy shock. We find that the effect is driven primarily by a shift in household demand from the owner-occupied market to the rental market. Using transaction level data, we show that when monetary policy tightens, renters are less likely to become homeowners and the home-ownership rate drops. This then crowds in the rental market and increases rents. We find that the increase in demand for rentals is accommodated by real-estate investors who capitalize on the higher rents by buying houses from owner-occupiers and renting them in out the rental market" [1].
Going back to the top, however, despite rent being "the single largest component of" CPI, we have not seen evidence anywhere of higher rates causing higher inflation. I suppose one could argue within the constant-unemployment state the effect of rates on inflation may be muted by the above. But again, being in an economy where private investment rivals personal consumption gives the Fed a lot more leeway on the upper limits of rate rises.
We could restore tax rates to what they were in the 80s, maybe. When I was a kid investment income was taxed at a higher rate than earned income. Maybe that's an idea.
Can you please stop formatting your posts like this? It's not what that feature is for (see https://news.ycombinator.com/formatdoc), and we're getting complaints.
> I just don't see much political appetite for austerity/entitlement cuts/more taxes
One of these things is not like the others, one of these things just doesn't belong...
Austerity and entitlement cuts are what we've been trying since Reagan. They haven't worked. They don't work.
Raising taxes is unpopular, sure, but a) it can actually solve the problems—not just the symptoms, but make a good hard dig in at the root causes—and b) if we do it right, only a tiny fraction of the people will have to bear those increases.
Because what we need to be doing is returning tax rates to what they were like before Reagan. Before "trickle-down economics". Before all this black magic shit that has never worked, will never work, and any actual economist with a brain and a functioning heart could tell you would never work right from the start.
Yeah, I'm generally onboard for higher top tax rates, some additional higher brackets, and higher tax on investment income, ideally paired with lowered rates on the lower brackets/higher standard deduction. This would hit me, but I think we need it to avoid some of the more extreme populist futures.
But we also really need to fix spending, especially procurement, the amount of wealth that we're collectively being cheated out of via terrible government contracts is staggering, there's a large network of extremely inefficient businesses that live off of the federal govt. Also, the medical system, though my understanding is that Medicare is generally getting a better deal than private insurers.
I'm fully onboard with being careful about government contracts—indeed, many of those terrible contracts are deliberately so; they're part of the corruption that's funneling money from the many to the few.
But 99% of the time, if you say "reduce spending", everyone, on both sides of the aisle, will hear "stop helping people", which is deeply counterproductive, as well as being cruel.
We have a little time, yes, but politicians aren’t exactly running to fix the issue. Far from it, they’re avoiding this and kicking the can down the road
Agreed. Maybe I'm just sensitive to the disaster fatigue overzealous promoters of the climate crisis inadvertently–and mostly good-naturedly–caused for a while.
The Republicans enacted starv the beast policy starting in the 80s with the plan of making debt/government unsustainable in the long term. What you are describing is the result of planned Republican policy.
Don't worry, with Democrats coming into office they'll reduce the deficit. All while Republicans shout and scream about the deficit being an emergency. Then Republicans will get back into power, enact massive tax cuts and balloon the deficit again.
Not to turn this too much into a political argument, but a lot of the things that have been discussed as the Democrat’s platform has been things that tend to increase government spending rather than reduce it, such as:
- Paid medical insurance for all
- Free child care
- Regulatory oversight which requires funding and committees etc
- Affordable housing (there are ways to solve this with gov spending and without, but likely we’ll need some form of gov incentives/spending)
I’m not commenting on the validity of these things individually, just that I don’t believe the Democrats since Clinton era have tried to reduce spending
Honestly I think it’s a fundamental hurdle with our political system. Charlie M’s quote of “show me the incentives and I’ll show you the outcome.”
The Democrats under Obama reduced the deficit meaningfully after the financial crisis recovery set in. The deficit went from $1.4T in 2009 to $0.6T by 2016. Part of that was the economic recovery, but there was also both legislation and executive orders that reduced spending and increased taxes.
The Budget Control Act of 2011 capped discretionary spending and cut $1 trillion over ten years, the administration further cut administrative spending by 20% via executive order in 2011. Subsequent actions reduced the deficit by $2 trillion, with 3/4 spending cuts and 1/4 tax increases (e.g. the 0.9% Medicare surcharge and capital gains taxes on earners of >$250k).
I agree with you, though, both parties seem to have stopped trying to reduce the deficit over the last decade, I think in part because it hasn't been rewarded politically at all.
I have some questions about this story. I ask genuinely out of confusion combined with some informed disagreement. If I glance at the deficit in [1], it seems the deficit was lowered a lot, after rising meteorically in 2009, so yes, _someone_ turned the heat down after turning it up super high. Not sure where you're getting a $2T deficit decrease though.
My confusion is augmented by the focus on the first derivative (the deficit) during this period while the national debt rose by more than $10T [2#Background]. It's not clear what matters more on an admins report card. Interest accruing is arguably less under your control, which might be relevant to this question.
Finally, I'm struggling to understand why the 2011 passage of the BCA (which cuts spending in exchange for raising the debt ceiling) is attributed to Democrats primarily. Reading [2], if I were to narrativize it, the story seems to be that the Republicans, spurred on especially by the Tea Party, forced Democrats to agree to spending cuts.
Quoth Wikipedia:
"The Republican Party, which gained control of the House of Representatives in January 2011, demanded that President Obama negotiate over deficit reduction in exchange for an increase in the debt ceiling, the statutory maximum of money the Treasury is allowed to borrow. The debt ceiling had routinely been raised in the past without partisan debate ...
Furthermore, in the House, 72% of Republicans voted for the bill, while only half of Democrats did. In the 112th Senate the story was more mixed, with about 86% Dems and 60% Reps voting yes.
I have not read all this shit in great detail but I hope you can appreciate my confusion, and invite you to indicate what I might be missing. For example, I don't why the deficit was so high in 2009. In one universe of explanations, the conclusion: it's not very praiseworthy to decrease the deficit you skyrocketed yourself.
The 2009 deficit was high because of the 2008-2010 financial crisis. Deficits increase dramatically in economic downturns because tax collections decline (job losses, lower profits, bankruptcies) and increased spending (unemployment, bailouts).
Most mainstream economists think it's good for a government to increase deficit spending temporarily during a recession because it helps prevent deeper recessions that cause long-term impairment of the tax base. If you let half the auto industry fail, for example, it may take a long time for your tax base to recover and start generating taxable income again.
After the crisis, there was bipartisan agreement that the deficit needed to be reduced, but the disagreement was on how. Obama was willing to cut spending but also wanted to increase taxes on higher income households, while the Republicans in Congress drew a hard line against any tax increases and wanted deeper spending cuts. In the end, they reached bipartisan bills, including the American Taxpayer Relief Act of 2012.
The debt ceiling brinksmanship was political theater. Republicans used the threat of defaulting on US debt in order to extract concessions from Democrats without having to agree to any policy demands. Congress passed laws with required spending every year and no one has the legal authority to not spend it. If Congress really cared about reducing the deficit, they wouldn't pass spending bills that required deficit spending.
As for increasing debt in the 2010s, I think it was viewed as a potential long-term problem but sustainable because interest rates were quite low. When inflation was at 2% and interest is at 2%, the US government was able to borrow money at 0% in real terms. Government spending on roads, airports, and even marginally productive projects that increase economic growth could be viewed as rational.
I think the US and world got complacent during the low interest rate era, and eventually realized deficit-spending in a low-rate environment boosted economic growth more than expected. The US doubled down on this by passing the 2018 Tax Cut and Jobs Act, which reduced taxes significantly without cutting spending concurrently, which created large deficits even during periods of economic growth.
The problem now is interest rates have gone up substantially, so debt servicing is going to become a much bigger burden. I don't think it's politically possible to reduce the deficit through spending cuts alone. The annual deficit is greater than the entire US defense budget and Medicaid combined.
Unless we suddenly get a burst of growth from AI that will increase our tax base, (which I think a lot of politicians are counting on), a long-term fix will require increased taxes (which will slow economic growth at least somewhat) and reduced spending (in particular lowering healthcare expenses, which are still rising at an unsustainable rate).
We're on like a half dozen straight Republican administrations of tax cuts for the rich and massive deficit spending combined with unnecessary wars.
Everything you just described is an investment that has a substantial positive output economically, Even when implemented incompetently.
It's so funny to see economic "rationalism" always pop up as soon as Democratic political waves appear, while when Republicans have all the control of the purse strings: utterly unrestrained fiscal malfeasance.
And the disturbing trend with Republican administrations is that the corruption and incompetence gets worse every cycle.
I'm not sure either party tries especially hard to reduce spending. Clinton was strong-armed into abandoning expensive social programs in his first term and had a hell of a good bubble economy paired with a pre-Norquist tax regime and a post-base-closure budget to reduce the deficit in his second term.
I would say "look at the numbers," but the 2008 housing crisis and the 2020 pandemic really don't make for easy comparisons.
But by a first order of approximation, I fear your statement is correct. Tax cuts sometimes goose the economy but always increase the deficit. Democrats sometimes advocate for tax cuts, but Republicans always do, regardless of the current macro-economic climate.
As someone else pointed out they will increase the deficit (over the baseline expectation) as they did before under Obama and Biden.
They might partially repeal tax cuts, but if they expand social security and medicare then the deficit will increase dramatically. Don't expect any of the recently elected senators to do the fiscally responsible thing when Social Security is insolvent in 2032.
1. Republicans get elected. Pass bills that cut taxes for businesses and ultra high net worth individuals. Maybe toss some crumbs to people.
2. Democrats get elected, notice budget deficit from previous cuts. Propose increasing taxes on W2 working class, including white collar. Businesses and UHNW people continue with their tax breaks and schemes.
High taxes don't work, that's why Europe is stagnating badly, and declining in many areas.
When you directly compare the US to Europe, the gap is widening rapidly.
Pretty clear that the high tax model is a complete failure. Not to mention a European brain surgeon is paid like a slave compared to an American one, and you can make those comparisons across any industry.
A Senior Engineer in Stockholm makes less than a new grad in the US, for example. And pays higher taxes!
Do low taxes in the US work for anyone other than the Epstein class? Ancient, crumbling infrastructure, rising cost of living & basic necessities, stagnate wages, shrinking middle class, massive transfer of wealth from the working class, worsening education and healthcare, corrupt government at all levels (corrupted by the benefactors of those tax cuts), market consolidation and collusion resulting in less choice, higher prices, and on and on. It's not all bad of course, for example some luxuries are cheap (such as phones or TVs.)
Sweden may have fewer billionaires flying child models to tropical paradises for coke and popper fueled orgies, but I'm guessing their senior engineers plans for long term unemployment or serious injury/illness don't often include choosing between suicide or homelessness so maybe they're doing something right? I'm sure a happy medium exists and we don't need to go back to our 'great' (1950s) era tax rates though
Again, the problem is a flooded labor market. When you get growth, the demand for labor increases. What should happen is the amount you can demand for your labor goes up, but if you have programs like H-1B and you effectively throw open the border, that won't happen.
I'd sooner see offshoring banned than programs that bring in potentially motivated/skilled workers here (though they should still have limits), and I think it'd be more impactful. Theres the obvious dev/IT impact, and we also have companies like Google and Tesla eliminating humans from the workforce with AI and farming out oversight of that AI overseas. When your Waymo or Cybercab makes an oopsie some guy in Manilla or Nairobi is going to be handling it while the out of work uber/taxi driver is shivering in a tent under a bridge.
Offshoring restrictions tend to founder on practicalities. Exactly what constitutes offshoring? If a company creates a subsidiary in another country and hires people to produce a product, is that offshoring? What about when it buys a product from an independent company in another country?
If I fire a bunch of people in the US and hire the same number of people in another country to work on the same project, that's clearly offshoring. But what if I don't fire anyone in the US? What if I fire them five years later?
The whole thing is a mess for regulation and I suspect if you wrote regulations that weren't easy to bypass you'd hamstring local producers.
That sort of crime-stop thinking is what keeps working class people just scraping by. I said nothing about race or tax policy. You're so busy looking for "code words" only you can read you've missed the point.
Tax policy is a red herring even if you don't realize it. Wealthy people never pay more than about 25% in tax. If you raise the actual tax rate more than that their tolerance for risk goes down and you gimp your economy.
why do you care about wealthy people's tolerance for risk ? nobody thinks of my tolerance for being overtaxed
I have far more in common with tech visa workers who are overtaxed on their W2 wages, than with big capitalist who never sells and never pays a dime to irs
We all care about tolerance for risk. Investing in a new venture is risky, and every calculation is a balance of risk and potential reward. If you tax away the reward, nobody will take a risk, and that will stifle job growth.
No new jobs means more competition for the jobs that exist, and that means lower pay.
they deploy capital. Capital can come from billionaires, but it also can come from public investment fund. In fact, billionaires often leverage public investment fund and invest little of their own. Capital demands return on investment. Return on investment is made using labor. This is how it works.
Taxes merely take a haircut off of billionaire's profits, they do not affect investments.
You realize we have had jobs even without billionaires, right ?
No, we really didn't. If you adjust for for the size of the economy, George Washington was the wealthiest American who ever lived.
It's not that you need billionaires. You need millionaires who are striving to become billionaires. That's where your tax policy can strangle job growth.
That's the experience of centuries, though I'd alter that to say taxing capitalists too much = no jobs. Clearly you need some taxation, but once you go too far you throttle your economy. They used to call that the Laffer Curve, and the vast majority of economists agree it exists even if they don't agree on the shape.
the epstein class has low effective tax rate, because they are able to write off a lot of their consumption.
large SUV? written off via accelerated depreciation.
hotel or travel or leisure? written off as a business expense.
the issue is not with the nominal tax rates, the issue with numerous tax breaks, carve outs, deductions and etc etc. Every single one of them costs hundreds of billions to the state/federal budget and has to be recouped via taxes on W2 workers.
W2 workers are taxed on wages (income), while capitalists are taxed on profits (so they are able to deduct a lot of stuff), plus all the tax breaks, offsets, deductions, carveouts.
plus capital gain tax is 10%, while marginal income tax rate (fed+state) can be 50%+
we W2 workers bust our asses off, only for half of the stuff get stolen away by uncle sam. Meanwhile rich capitalist just watches his portfolio go up and to the right, and pays 10% (if he ever pays! lot of them just borrow, instead of selling)
But if we committed to reducing the deficit, we wouldn't be able to give tax breaks to AI Data Centers, Bomb Iran or subsidize our private health care system.
I think it's worth remembering that China isn't a monolithic bloc, and CCP doesn't drive everything, that there are tons of private enterprises there that would benefit, even if the Chinese government strategically would prefer to push Huawei to grow the domestic capability. There being a ton of private demand internal to China doesn't invalidate Jensen's view that it's a strategic blunder to let Huawei get a foothold in the market. Within the CCP, there's also a lot of inter-regional competition to show growth in their own regions, because that's the primary qualification for advancement within the party.
That said, I don't have any special insight into the specifics of who was driving the demand backing Megaspeed.
there's a good analysis that says Alice was a fixer and/or white-glove. those are common-in-China roles that have to do with obfuscating big financial operations, not necessarily with any political (CCP) involvement. obviously, CCP approves, if tacitly, everything that happens in China.
Which part? You find it hard to believe that there are private enterprises there that don't always do exactly what CCP wants? Or that there're conflicting incentives inside the CCP, so that "what CCP wants" isn't simple?
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