It implies the money is destroyed by taxation. In reality that money would go towards relieving the governments need to collect other tax revenues. So for example you could increase the standard deduction. Now everyone pays less tax and can either contribute more to their 401k (boosting stock values) or buying more things (boosting stock values). If you want to say the government is incompetent and will waste the money, that doesn't apply here because it applies to every tax, not specifically this one.
There's no world where the government takes money from taxpayers and doesn't just turn around and spend it. Often this spending is several orders of magnitude more wasteful than private individuals spending their own money, because government agencies have extremely weak incentives to spend efficiently. They spend, run out of money, and just stop whatever they were doing because, oops, out of money until the next budgeting cycle.
Value is destroyed by taxation, money is just a proxy. We spend on government because there are things we need that only government can do. Wealth transfer is not one of them.
I can see your training is now complete my dear socialist!
It’s incredible how our education systems fail to teach the most basic economic realities to people. Capital gains result from allocating capital wisely and taking massive risk. This actually makes them very well “earned” in the one system that is most responsibly for the improvement of the human condition than any other system ever conceived by humans - hint: because it’s organic and natural!
In contrast your socialist nonsense is an ideology based on Envy masquerading as Empathy. It is responsible for the most death and destruction by any system conceived by humans - hint: it’s because it’s evil and artificial! To attempt to steal from and punish the very capitalists responsible for lifting humanity up and forward due to Sloth and Envy is truly disgusting!
It’s very interesting that extensive propaganda has somehow convinced newer generations that libertarian capitalism is actually anarchy, which it is absolutely not, if fact it’s not even related. Liberalism in the classic sense, and therefore libertarian capitalism, requires a strict government enforcement of property rights, individual rights, rule of law, and (extremely important!) to it’s health functioning a well regulated markets free from corruption! anarchy and oligarchy have no relation to capitalism! You are confused my dear socialist.
Please help yourselves and learn the truth. Don’t live your lives consumed by the evils of Envy and Sloth!
The IRS classifies "taxable interest, ordinary dividends, and capital gain distributions" as "unearned income" and "salaries, wages, tips" as "earned income" (see e.g. Form 1040 instructions). Are you suggesting that the IRS is pushing socialist propaganda?
You see there is nothing more honorable than risking what you have for a better future for yourself and others. Capitalists are the actual heroes in the world. Socialist governments the single biggest evil.
Capitalism isn’t an intuitive concept and that’s caused by our evolutionary past, much like our desire for sugar and fats cause us health problems, our evolutionary past with Envy is making us sick, where it once made small groups perform better and survive longer. In a tribal setting Envy encourages the middle of the group to reach towards the accomplishments of the best performers. Unfortunately in a large scale society the middle and bottom of the group can’t conceive of how to reach the top performers and can only think of cutting them down resorting to theft which lowers overall performance.
Some insightful quotes to help:
"Socialism is an alternative to capitalism as potassium cyanide is an alternative to water."
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
"The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both."
"The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities."
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."
“The case for capitalism is counterintuitive: to most of us, capitalism simply feels wrong. Socialism, in contrast, chimes with our moral intuitions. Socialism simply feels right. Being a socialist is a 'default opinion', which comes easily and naturally to us. Appreciating the benefits of a market economy, in contrast, takes some intellectual self-discipline. Even prominent free-market intellectuals, such as Milton Friedman and F. A. Hayek did not start their careers as free marketeers. ”
Now we have a serious conundrum. If words can only have a single meaning regardless of context, surely we need some sort of centralized authority to manage this authoritative dictionary. Who should that be?
The answer to your conundrum is trivial as hopefully you know and your comment was made in sarcasm. However given the serious brain rot civilization id experiencing, for those who don’t understand the sarcasm, I’ll explain.
Unconditional free speech solves it. The IRS can call it want they want and I can say they are idiots and evil. As long as we are allowed to speak truth then there is hope.
The ministry of truth will bring nothing but death and destruction. You are forewarned.
I wasn't being sarcastic at all. When the IRS classifies some things as earned and others as unearned, they are using the definitions of those words as provided by Congress in the law that was passed.
We have the liberty to assign whatever meaning we want to words, but at the same time we need to come to agreements on what those words mean to be able to communicate effectively. In the US, laws almost always have a table of word definitions at the beginning. Some of them are longer than the actual law!
It's almost paradoxical to rail against the IRS text as socialist propaganda. You are imposing your definition of "earned" on everyone, but the US government is saying "you will use the English language however you wish, but just to be clear, when you read this law (and only when you read this law) this is how to interpret the words"
I know you watched 18 hours of PragerU videos and consider yourself an expert on macroeconomics now, but you've got to cool it a bit, my post did not mention socialism or capitalism, or anarchy... In fact, as an owner of a bunch of mutual funds, that means I am literally a capitalist!
Your copy pasted blurb that you keep around for every time someone mentions taxes isn't impressing anyone, since the people in the conversation who actually know what's happening will immediately say "uh, why did this guy write a rant about how capitalism and anarchy are different in response to a post about earned vs passive income? Is he clueless, or a bot?"
Anyway I'm gonna humor you for fun. Whether or not something has risk does not mean it is earned. The roulette table has risk, but if I win I didn't earn anything I just got lucky. At the same time it is extremely easy to invest risk free with treasury bonds. It's also extremely easy to invest with 0 risk of going to zero with a total market fund like VTSAX, VTIAX, or VTWAX. So careful capital allocation is not needed to make an average of 7-8% real returns for 150 years. Your reasoning for capital gains being earned income is that it requires allocating wisely and taking risk, but neither of those are necessary, and therefore it is not strictly earned income by your own logic.
If the only way to get your money to make more money was by deploying it smartly you might be right. In that case we'd live in a world where stocks, bonds, properties, etc on average returned 0% real with no dividends. In that case, stock picking would require work. You would need to pour over financial statements to find good companies that will make a profit. But you don't. All it requires is having money. So: passive.
Also, it should be noted that the risk involved with deploying capital is running out of money. If that happens you have to work to make money. The risk that capital owners undertake is not like the risk a farmer takes when sharpening their tools, the risk of injury or death. It's the risk of having to become like the farmer, someone who needs to work to make money. The idea that these two things are different is not controversial to any economist anywhere on the political spectrum. It's why there is a term for it: Earned income vs passive income.
Also, this is truly one of the funniest things I've ever read: "it’s organic and natural" and "requires a strict government enforcement" in the same comment. I don't think your copy pasted post is as persuasive as you think it is. There are vastly better arguments for capitalism that are easier to make, I'd recommend spending some time in actual economics courses learning how the world works.
Money market funds and short term t-bills are basically always liquid at face value, unlike longer term bonds. They fall below investment value maybe once per 50 years and that usually lasts a couple days.
US money market funds fall under strict regulations (including around liquidity and redemption) post global financial crisis to preserve their net asset value at $1 (to prevent “breaking the buck” or losing value). Can you be more specific as to what mismanagement looks like?
Depends on the money market fund. There are US treasury only funds like FDLXX, basically the only situation it would become unable to meet it's cash flow obligations is if there where no buyers for US treasuries at face value.
And frankly if that's the case I wouldn't be betting on FDIC or equivalent insurance actually working anyways.
But even "less" secure ones are heavily regulated to be kept at 1$ of NAV and SPIC backed.
Just buy the short term T-bills directly and hold them. They're as liquid and you don't have to worry about any risk besides US government default. Why pay a fund even 5 basis points simply to build a ladder that you can build yourself?
The IRS doesn't have the authority to mandate the creation of a secure national ID system and enforce it's use by the financial system. Only congress has the ability to really do that. The IRS collects revenue.
Even if it did have that authority, it doesn't have the budget to accomplish that goal.
isn't it funny how no government service is ever at fault, it's always just a problem of funding? The IRS is good, just under funded. Public schools are good, just under funded. The NHS is good, just under funded. The roads are good, just under funded
except then funding is raised, and it's still a problem of funding. and inevitably, it's the evil side of the government (you know the one) that is to blame, even if there is no money to spend.
how does a public service determine when they have enough funding?
This is neither a problem of funding or any government service being at fault. This is the fault of American culture. A national ID system sounds too scary to too many Americans. Politicians aren't going to waste their political capital on pushing through something so unpopular. It really isn't any more complicated than that. There is a huge desire for some sort of national ID system and SSNs are the closest we got so they filled the vacuum. It is silly to blame that on the IRS. It is a societal failure.
I'm not trying to be combative, but this sentiment just doesn't pass the smell test to me.
Yes, I agree that there is a cultural undercurrent of fear around a national ID system, and I also agree that politicians are likely to game their political capital for the greatest return in their career.
What I do NOT believe is that the Social Security number just sort of came about and started being used by government services such as the IRS without anyone being responsible for that huge organizational decision or the initial (current?) lack of security controls around its implementation.
To me, it seems to be an almost certainty that it is both an organizational problem at the government service level AND (as a result) a funding problem.
>What I do NOT believe is that the Social Security number just sort of came about and started being used by government services such as the IRS without anyone being responsible for that huge organizational decision or the initial (current?) lack of security controls around its implementation.
They didn’t “just sort of come about”, they were created for this exact purpose of tracking government services. Over the years, the number of government services expanded because of the lack of other alternative like I said.
And the lack of security around SSNs is because they weren't intended to be secret. It is generally private sector groups like banks and credit agencies that have turned this into a problem by treating SSNs as if they are a proof of identification. They were created as usernames, but people treated them as passwords.
> They were created as usernames, but people treated them as passwords.
Fully agree, but I don't see how this refutes what I and the root-level comment (anti-IRS sentiment aside) are saying.
> the lack of security around SSNs is because they weren't intended to be secret.
The lack of security is not BECAUSE they weren't intended to be secret. The lack of security is because numerous organizations (including the IRS, until their introduction of an IP PIN) treated these "usernames" as though they were passwords.
It's not a design problem with original intent of SSNs, it's an implementation problem with any organization using them improperly. Gov't services are just as responsible as banks and credit agencies when they misuse them.
When exactly has funding EVER been raised for any of those things??
That's one of the biggest political fights in the past century: austerity, cutting public spending, and means-testing the fuck out of every social program the government even still offers. This has been the case since the 80s reagan-thatcher year. You can literally look at the budgets of major cities and easily see where the majority of spending goes. Hint: it ain't public schools. Were you not paying attention when people were talking about how much police departments get paid out of the budgets of their cities a couple years back? Have you EVER thought to actually substantiate your beliefs by actually looking up the policies that effect public spending and government budgets?
Is the answer "no"?
And it isn't just a problem with funding, it's a legislative and cultural problem too. But in the short term, without drafting up new laws or changing the culture of society, the best we can do to fix these issues is provide more funding.
In the private sector, OKRs and KPIs are used to track performance and provide metrics on whether a company is meeting its goals. Boards review these metrics and decide on additional investments based on thorough cost/benefit analyses.
I imagine it's similar in the public sector, where funding is determined by the needs of the public, political considerations, long-term planning, and so on.
One thing not mentioned in the article: People may be wondering how this book became so popular, basically it's because it became intimately tied to the MLM movement, Amway specifically but it did spread beyond that. People at the top of the pyramids would buy thousands of copies to send down their "downline" as part of a motivational tool. The primary goal of someone near the top of an MLM is to convince everyone down the line that you are ripping off that it's their fault for not hustling hard enough, and this book was and is one of the popular ways of doing that.
We could effectively geoengineer one by pumping things into the upper atmosphere ourselves, but there's a lot of questions about that and we have no idea if this would help more than it hurt.
This is just one of the thousands of cases of a journalists fawning over any ML/AI thing with no understanding of the garbage-in garbage-out problem, and all the other issues with ML. You are completely right, attempting to simulate an individuals coronary systems is 100% out of our wheelhouse right now. At very best it's going to tell us things we already know, that people with clogged arteries are at risk of a heart attack. At worst it's a grift on par with fully body scans on healthy individuals.
I'm not saying ML is useless, far from it, but this is reminding me a lot of Eric Yuan (the CEO of Zoom) talking about AI clones in meetings: https://www.youtube.com/watch?v=dKmAg4S2KeE
The only similarity I see between this and the dumb Zoom thing is that the term "digital twin" sounds like it should mean "that stupid idea where you send your clone to a meeting".
That's not what "digital twin" means though: it's been used to describe digital simulations of systems (like the circulatory system described in this story) for a long time: https://en.m.wikipedia.org/wiki/Digital_twin
I've seen the dumb AI clone idea called "personal digital twins". I don't like that it steals and dumbs down the existing useful term but we may be stuck with it.
This. It's really weird the way we suddenly live in a world where it's the norm to take whatever a tech company says about future products at face value. This is the same world where Tesla promised "zero intervention LA to NYC self driving" by the end of the year in 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, and 2024. The same world where we know for a fact that multiple GenAI demos by multiple companies were just completely faked.
It's weird. In the late 2010s it seems like people were wising up to the idea that you can't implicitly trust big tech companies, even if they have nap pods in the office and have their first day employees wear funny hats. Then ChatGPT lands and everyone is back to fully trusting these companies when they say they are mere months from turning the world upside down with their AI, which they say every month for the last 12-24 months.
> What makes this interview – and really, this paper — so remarkable is how thoroughly and aggressively it attacks every bit of marketing collateral the AI movement has. Acemoglu specifically questions the belief that AI models will simply get more powerful as we throw more data and GPU capacity at them, and specifically ask a question: what does it mean to "double AI's capabilities"? How does that actually make something like, say, a customer service rep better? And this is a specific problem with the AI fantasists' spiel. They heavily rely on the idea that not only will these large language models (LLMs) get more powerful, but that getting more powerful will somehow grant it the power to do...something. As Acemoglu says, "what does it mean to double AI's capabilities?"
I don't think claiming that pure scaling of LLMs isn't going to lead to AGI is a particularly hot take. Or that current LLMs don't provide a whole lot of economic value. Obviously, if you were running a research lab you'd be trying a bunch of different things, including pure scaling. It would be weird not to. I don't know if we're going to hit actual AGI in the next decade, but given the progress of the last less-than-decade I don't see why anyone would rule it out. That in itself seems pretty remarkable, and it's not hard to see where the hype is coming from.
That line of thinking would not have reached the conclusion that you imply, which is that open source == pure altruism. Having the benefit of hindsight, it’s very difficult for me to believe that. Who knows though!
I’m about Zucks age, and have been following his career/impact since college; it’s been roughly a cosine graph of doing good or evil over time :) I think we’re at 2pi by now, and if you are correct maybe it hockey-sticks up and to the right. I hope so.
It implies the money is destroyed by taxation. In reality that money would go towards relieving the governments need to collect other tax revenues. So for example you could increase the standard deduction. Now everyone pays less tax and can either contribute more to their 401k (boosting stock values) or buying more things (boosting stock values). If you want to say the government is incompetent and will waste the money, that doesn't apply here because it applies to every tax, not specifically this one.