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.
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.
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.
Social security is funded through payroll taxes on employees and emloyers. The "run out" is in the sense of the amount of money going out exceeds that coming in and the saved funds have been depleted. In this sense, it can "run out" that the savings are depleted and the plan is cash flow negative.
The narrative and word choices are deliberate. Republicans want to get rid of Social Security. So the narrative is Social Security is fundamentally broken, and it can be silently ended through passive negligence without having to take responsibility for ending a popular entitlement. No matter that it was created with the expectation that Congress would periodically adjust the retirement age to keep it solvent, and that it was always intended to provide only a bare minimum benefit, just enough to keep you out of the poor house. Poor houses were real, common things back then, and what the "free market" will result in.
Social Security revenue and expenditures can easily be balanced in theory. But neither party wants to do the right thing--Democrats want to expand entitlements, and increasing the retirement age as originally designed is the opposite of their goal.
I don't quite understand what you mean the narrative here -- cash flow going negative is a fact. Attempts to discuss the COLA issues in 1970s-1980s [1] have failed. Attempts in the early aughts to divert funds by Bush Jr. [2] (long before I could even vote) were rejected in part because of skepticism stock returns would not perform well. And even today where we have additional tax breaks for seniors under the OBBA.
This has been a long running "heads we win tails you lose" with the older generations toying with the future dating back ~50+ years. Statements about "poor houses" don't mean very much when even uncapping the tax on wages for social security would only close ~61% of the gap [3]. Cuts are coming.
In the 1984 Social Security was in the same situation it was today. To balance things Congress (among other lesser measures) set a new schedule for bumping the retirement age, the last step of which only took effect recently. It's not a coincidence. It's been over 40 years since then; it had been 49 years between then and the creation of Social Security.
The narrative is that Social Security is broken because previous generations were idiots who didn't understand or care that lifespans would increase, yet chose to create a fundamentally unsustainable entitlement program anyhow. But lifespans are right on track today as expected in 1984, just like lifespans in 1984 were exactly where actuarial tables predicted them to be in 1935. And Congress in 1984 expected their successors to do today what the 1935 Congress expected of them. A program isn't fundamentally broken just because periodic maintenance is required. OTOH, in theory the 1935 Congress could have attempted to implement a perpetually self-healing, self-executing algorithm, as could have the 1984 Congress. They didn't because politics doesn't work that way; kicking the can down the road to a future Congress is typical, though kicking it 40-50 years down the road is pretty laudable, all things considered.
Obamacare did try to create a self-executing process to reevaluate costs, and it failed miserably, because it required perennially revisiting contentious points of policy, and to do so outside Congress. The president had the responsibility, but no accountability, because failure would be blamed on Congress, and the Democrats especially. In that light, the approach taken wrt Social Security seems prudent.
> This has been a long running "heads we win tails you lose" with the older generations toying with the future dating back ~50+ years
Yep. I call it the old eating their young. Society cannot exist in such a condition for very long. They will collect full benefits while paying in relatively less, and die before it becomes their problem.
And while Social Security is the big one everyone talks about, there are a whole lot of state and municipal level public pensions that are exceedingly underfunded. These come due at pretty much the same time. The problem was the same with those - workers at the time did not want to pay more taxes but wanted to enjoy the benefits that those current pensioners provided them. They borrowed from the future generations to do it.
Interesting. Where is this product located? If I'm looking at your profile correctly, this appears to be Openship[1], which is just a collection of starter templates from something from Nextjs and something called Keystone for each vertical. Is this what it is you are talking about?
I'm very curious how much revenue this is generating.
Yes, it’s built on the shoulders of giants, Next.js[0] and lesser-known Keystone.js[1].
Next is a full stack framework and Keystone is a CMS built on top of Prisma and GraphQL. Keystone was created by this Australian company called Thinkmill. They have used it to help businesses build custom backend systems for more than a decade. But it needed to be deployed separately from Next and they were using emotion css for their dashboard and I wanted to use Tailwind/Shadcn. So first, I had to make the Next Keystone Starter that brought in Keystone into Next so each SaaS is just 1 Next app with a built-in storefront, GraphQL API, and dashboard.
Once that was built (and it took a while tbh), I started to build the Shopify and Toast alternative. But the itch to get these built quickly and autonomously had me working on the harness in the past months and now that is nearly complete.
Here is the e-commerce[2] and restaurant[3] repos. They have a link to deployed demos you can check out as well.
As far as revenue, I don’t feel comfortable relaying that right now. We have other revenue streams like fractional CTO where companies give us equity to manage all their tech and that is quite hard to quantify. Before Openfronts being built, I built Openship, and e-commerce OMS and that has exceeded 5M orders processed since its inception in 2019. That’s not counting orders by businesses running it on-prem.
I actually posted about this vision on HN[4] when I launched Openship and the response is what kept me building.
Second, take this for what it is: your product may not be compelling in its current form. Building it to many different markets will not make it compelling. If you had a stronger revenue, please share it. This sounds incredibly thin.
Third, dont mistake building the same thing 20 times for different verticals for bonifide software skills. When a SWE builds the thing they have built before its usually to learn a language which is the easiest part of software. There is a reason a common adage in software is "9 women cant make a baby in a month". Breath is no replacement for depth.
Don’t take my word for it then, ask any terminal agent to dig in and get an idea of how good these apps are.
In the end, I built Openship and Openfront for my e-commerce business and then turned them into SaaS. All the revenue for these are just a cherry on top of our existing e-commerce businesses.
And I worked with Next and Keystone long before AI came along. Check my GitHub commits if you need some back story.
And I’m not building these 20 SaaS to prove I have bonafide SWE skills. I’m building them because I plan to have my own gyms, hotels, grocery stores down the line powered by these SaaS. SWE to me a means to an end and that’s to have many different businesses.
> Don’t take my word for it then, ask any terminal agent to dig in and get an idea of how good these apps are.
Okay but, you know this isn't a quality metric right? These models are incredibly biased towards positive confirmation of the prompt. I could give them nearly any repo and they would sing the praises of the best parts, if I asked.
I never told you what prompt to even feed your AI my guy. As far as I know, you can be like rip this repo to shreds and tell me what’s wrong with it and you’ll get your answer.
Crazy how you guys blindly trust proprietary apps where you can’t even read the code but asking you to read open-source code is psychosis?
You say you only use open-source and I’m the same way but I’ve asked agents to evaluate open-source alternatives. How is that psychosis? If it’s typescript or JavaScript, I can read the code but if it’s Rust/Go/etc, yeah I get AI to read it and tell me if it can solve my problem or if it has the features I need.
It’s actually the whole premise of my open source alternative directory called Opensource Builders[0].
That’s the neat part, you can use it headlessly. The built in dashboard and storefront are using the GraphQL API but you can deploy your own external dashboard and storefront using the same API.
We’re also very bullish that the chat interface is the universal UX now. Instead of sifting through the dashboard to change a product price or sell in a new region, you can use the built-in agent and just tell it to do that. Every Openfront comes with an MCP server that interfaces with the API so the agent can literally do anything you can do using the dashboard and API. This is where an agent running the business autonomously comes in.
And even then if you’re not satisfied with the backend API for each vertical, these Next apps can be forked and adapted to tightly fit your business instead of you messing with configs, you can make the app your own.
Having see what terminal vibecoding looks like (to the point where customers say "fix your app" during renewal conversations), I don't think this is likely to happen. There is definitely selection pressure being applied to SaaS companies and I would not expect people not directly responsible (PMs, sales, etc.) to be willing to accept responsibility for technical outcomes; after all they are product, not software experts.
It is possible this leads to a decrease in salary (and positions) but I do not believe the social commentary will pan out in the manner the author proposes. The people who most argue for vibe coding will themselves never accept responsibility for the technical outcomes.
> The people who most argue for vibe coding will themselves never accept responsibility for the technical outcomes.
This is right, and don’t think this isn’t all partially fueled by spite. I’m not sure if engineers understand how much they’ve been simultaneously reviled/revered by non-technical people. They see this as a Prometheus moment. They would love to vibecode a mess and make the engineers deal with the details.
I guess to use the car analogy, if the tech companies said they've made a robot that can fix your car, a car-ignorant will think the robot is all-capable and works as good as a mechanic.
A lot of people don't know what writing software involves, and believe "AI can do it now!".
And when they point out the rare exception it’s always ”well, as a UX designer/product manager/etc I spent thousands of hours now working with AI to build products and if I don’t understand something then I ask the AI to teach me” - congratulations you haven’t replaced developers you just became one
Because then the units fall into disrepair (because they no longer make sense to maintain) leading to less supply leading to lower availability of units leading to higher cost of housing.
See what happened in NYC regarding the consolidation of housing units.
Not really. Social security is a defined benefit plan that requires new payors to fund todays expenses. 401ks are a defined contribution plan. Very different.
Set it on fire? I'm confused what your model of Google leadership is. Do you think they're being duped? Or controlled in some way? What is your theory of mind for Sundar's decision making process here. That he's committing fraud?
Because the obvious answer is that he has compelling financial data telling him that this $80B now will produce a positive return on investment in the future. But you of course seem to disagree.
Why? There’s $80B of dilution from new shares issued, so to keep share prices constant market cap would have to increase by $80B. Simultaneously, there $80B in additional assets on the balance sheet, so if the company was previously correctly valued at $N market cap it would now be correctly valued at $N+$80B market cap, right? My intuition is that capital raises, just like stock buybacks, should be first-order (“mechanically”) share price neutral.
In practice there's a lot of issues with asymmetric information. The company knows its own operations and financial position better than random traders on Wall Street. It is rational for it to buy back stock when the market value is lower than the true intrinsic value of the company, and to sell stock when the market value is higher than the true intrinsic value of the company. Therefore, traders often treat buybacks as a signal that the company is "cheap" (at least in the company's own view) and pump up the price accordingly, and treat stock issuances as a sign that company management believes that the stock is "expensive" and push it down accordingly. Company management has more inside information than market participants do, but is usually prohibited from trading on it. Stock issuances and stock buybacks are one of the few cases where insider-initiated trading is legal, because the benefits accrue to the company as a whole rather than a few individuals.
I agree, and traders will also take into account the fact that there is a gold rush going on (into AI) and consequently view this issuance as not as much of a sign that company management believes that the stock is expensive as they would have if no gold rush were going on.
This is true in a "yes but" sense. Typically equities of the mega caps benefitted from debt issuance on the expectation it would accelerate growth. The change to equity value loss is what is interesting: the market no longer sees this as generating growth, at least not like it used to.
Ok but GOOG also has a ~$70B per year stock buyback program for that. It's a little goofy to be buying back and issuing $80B of new shares at the same time.
The company has less cash in the balance sheet, so its market cap decreases. But there are fewer shares, so the share price is the same.
(This allows hypothetical future growth to disproportionately benefit existing shareholders, but does not intrinsically increase stock price.)
In practice, like another poster pointed out, it signals the company’s belief that its own shares are undervalued, so the market usually increases its estimation of value.
You watching all your neighbors sell their beachfront property right before hurricane season: "This isn't really a signal because these transactions are all zero-sum"
Supply and demand of Google equity. The fundamental value of a share doesn't change, but you now need more investor capacity to hold the equity. So you need to sell to investors who weren't quite willing to pay the previous price.
It's not based on the fundamental value of the stock so maybe you wouldn't consider it "first order," but I think you can still call it "mechanical."
Don't forget that the denominator (total number of outstanding shares) will be increased by this as well. So even if the market cap reacted exactly one to one like you're proposing the per share price wouldn't stay constant necessarily.
Sure but people are no longer expecting these kinds of actions to generate equity gains. Before it was expected the growth would outpace the cost of capital, leading to equity appreciation. The directional change is what is interesting.
[1] https://www.aarp.org/money/retirement/peak-boomer-readiness/