The most effective way is likely not broad-based cuts but targeted cuts to old-age spending via means-testing to induce liquidation of 401(k)s or other savings or tangible property to pay for their own care. I feel the longer (and slower) this trainwreck proceeds, the more likely this outcome is palatable. Roughly 52% of retirees have 250k or more in savings [1]. It is far preferable to drawdown those prior to either cutting benefits or raising taxes.

[1] https://www.aarp.org/money/retirement/peak-boomer-readiness/

Fyi asset testing and means testing are different, but yes that is absolutely a good way to implement things from a utilitarian perspective. From a political perspective... Old folks vote. It is a tough situation.

Assets are for practical purposes means and when relatively comfortable retirees draw on SS/401(k)s it is income. There are broadly two choices for the wealthy retirees:

1. cut back on SS and other benefits you can afford out of pocket 2. tax your income higher

I would wager they would choose 1. To this group, the taxes hurt worse than the benefit losses

For poor retirees: 1. cut benefits 2. don't cut benefits

I would wager they would choose 1

The other two commonly suggested fixes -- tax the wealthy and broad tax increases -- also fail in my opinion. The holes we are talking about are in the hundreds of billions per year and won't be fixed by taxing just the wealthy. A broad middle class tax increase will also likely be rejected as unpopular.

It really is my belief that a slow-motion failure here is best. If any fix occurs as the social security trust fund is at 0 cash and while the bond market is in revolt, there will be no fiscal room to maneuver to raise cash from the debt which forces rationing.

I find this hard to believe in this context. They should be utilizing load shedding or admission control and killing/rejecting jobs rather than hard failures if it is a scaling issue. It's much more likely an actual software defect than just more load. If this was the case (which they would likely prefer) free/public tiers would be removed first to preserve paying customers services.

Why not both? Higher base load combined with insufficient internal controls for ratelimiting/load-shedding (as in, they don’t know who to shed) would be explanatory.

If they can't implement something as simple as "decode upstream headers and determine if 429/503" I don't know what to say. Since this has knocked out all customers it indicates they likely don't have anything of this form implemented.

I meant shedding of legitimate base load, not retries. I think we can safely assume they do the latter.

Cloud procider revenue is generally understood to be highly durable and safe because it is associated with both diversified customers and workloads which are expected to be reasonably constant in aggregate.

Zitron's point is thay OpenAI and Anthropic have generated considerable sector concentration in GCP and Azure. If the LLM sector were to contract in volume, this concentration could harm cloud providers financials more than what would normally be expected based upon their prior revenue streams.