[charliebwrites]

My hot take: We’re already in a recession.

We just use AI to justify doing all the same recession behaviors while making it sound like innovation

- not hiring this year > AI is making us productive!

- no wage growth > AI means we don’t need to raise salaries

- layoffs > with AI we can do more with less people

- spending less on offsites, work perks etc > we really need that budget for AI

- not spending money on that new business tool > AI can do it instead

[candiddevmike]

My hotter take: we're in an economic death spiral. There isn't enough juice that can be squeezed short of mass wealth redistribution to reinvigorate the economy, and what is out there is locked up in stocks that don't translate to revenue. Slashing rates will just skyrocket prices and over inflate our monetary supply, and further tax cuts will only whittle away what's left of government services and social safety nets. Companies are going to start collapsing in a domino effect as liquidity dries up and contracts get cut.

[hmmokidk]

Massive wealth redistribution is just another word for Taxes.

When we taxed the rich we were happy. It’s literally all we gotta do.

[garciasn]

https://fred.stlouisfed.org/series/FYFRGDA188S Federal Receipts as a Percent of GDP measures total government revenue relative to the size of the economy, serving as a standardized way to track the federal tax burden over time.

Although the top marginal tax rate in the 1950s indeed exceeded 90%, federal receipts hovered around 17% of GDP; this was nearly identical to current levels, because loopholes and high income thresholds (roughly equivalent to $2MM for single/$4MM for couples) meant almost no one actually paid that top rate.

The effective tax rate for the top 1% was closer to 42% rather than 90%, demonstrating that extremely high statutory rates on paper do not necessarily generate proportionally higher government revenue.

[rich_sasha]

The total tax intake is fairly unambiguous. Personal tax bill for the vast majority of people is also quite clear. But when you get to the top 0.1% or whatever it is, things like "income" and "tax" get ambiguous. I suppose a lot of the ultra rich don't have much earnings, at best cap gains, and even that can be offset, boxed and off-shored ad nauseam.

Maybe instead of looking at the ultra rich we could look at what GDP fraction the "bottom 95%" contribute to the tax burden - is that more or less than before. Not sure where to look for this data but sounds like a nice little exercise.

[gruez]

>But when you get to the top 0.1% or whatever it is, things like "income" and "tax" get ambiguous. I suppose a lot of the ultra rich don't have much earnings, at best cap gains, and even that can be offset, boxed and off-shored ad nauseam.

But the denominator isn't "income", it's GDP. That's far harder to "offset, boxed and off-shored ad nauseam".

[rich_sasha]

Sure - but not at an individual level. If you're asking, how much tax are the rich paying now vs before, as a % basis, you need an individual numerator and denominator.

Maybe the total tax take now is 17% of GDP, same as before, but when measured correctly, the overall tax rate for the super-rich has gone down, and for the plebs gone up.

To even identify who the super-rich are in this exercise, you may need to be careful with the definition of "rich". If eg you go for highest income earners, you might find upper middle class people instead, with the super-rich having no supposed income as such.

[milesvp]

Raising taxes should never be seen as a way to raise revenue. Even if the Laffer curve has come under attack, there is still some profit maximizing rate which I’m positive most modern countries are beyond both at a static rate and at a growth and future revenue maximizing rate. No we don’t tax at this point to increase tax revenue. We do tax to shape what society looks like.

Right now society doesn’t look very good to so many people in the US it’s almost hard to talk about. Job growth is literally people saying, “hey, tomorrow, I can see it look better. We can spend time and resources to create something we all want more than today.” When job growth is low, that vision must also be low.

Taxation can turn that around in an industry. It can turn that around in aggregate. It does thay by both signaling to players, and by changing the game tree payout structure.

I think much of the taxation conversation right now is unfortunate because it keeps getting couched in terms of tax brackets, and that is almost a strawman at this point (even if many people think it’s important). I would say we need to tax the 1% differently. For instance, stock buy backs are currently a hugely distorting effect on the world economy. You can start by greatly taxing that.

The real thing people are talking about when talking about taxing the 1% isn’t just about tax brackets, it’s more about how taxes don’t materially effect people once they reach certain thresholds. It’s the same fundamental problem with traffic tickets. They are not proportional to general wealth so that means it’s a set of laws that apply less and less as one gains wealth which not only feels unfair, it is arguably a corrupting influence undermining the rule of law.

[garciasn]

I am choosing not to get involved in a discussion about tax policy miniutiae as I am not an expert in any related way; instead, I wanted to provide factual context to the oft-repeated 'America was better in the 1950s due to the tax rate on the rich,' claim so folks might be able to better understand what they're attempting to say.

[kiliantics]

It's about how the taxes are spent too. If the government cuts welfare and gives handouts and subsidies to special interests, that is not an effective redistribution.

[gilbetron]

It would be interesting to see the same graph broken down by wealth (preferably) or income quintile. Maybe higher tax rates don't mean more tax income, but it does mean more wealth redistribution.

[iamtheworstdev]

no one pays the top rate today either. I've spent a large chunk of my adult life in the top 5% of income earners and I've never had an effective tax rate over 17% that I can recall.

[loeg]

Your experience as a 95 %ile earner does not negate that people in the 99 %ile of earners pay the top rate. (I paid the top rate last year.)

[NickC25]

and the effective tax rate today for the ultra wealthy is 0.

Shit, a few years ago Jeff Bezos got a tax credit for his kids.

Think of how absurd that is. Jeff Bezos, the founder of a multitrillion dollar corporation that already receives billions in government contracts and subsidies, who owns a $500m yacht and a multibillion dollar real estate portfolio, asked for, and was given, a tax credit for his adult children.

[DetectDefect]

It really is this simple and this chart of Net Worth Held by the Top 0.1% demonstrates it well -

https://fred.stlouisfed.org/series/WFRBLTP1246

[bpt3]

That chart seems to demonstrate that there was a lot of inflation in the early 2020s, which I assume is not your point.

[daemonologist]

Here's one for share of net worth: https://fred.stlouisfed.org/series/WFRBSTP1300

(Note: I am not GP, and am not necessarily saying you can draw conclusions from this one chart, just that the change in net worth cannot be attributed solely to inflation.)

[bpt3]

You can argue it was primarily due to inflation (changes in the economy can never be attributed solely to any one thing).

The upper 0.1% largely owns things that are relatively safe from inflation (like expensive real estate in areas where increases in value have exceeded the rate of inflation for decades) while the lower 50 - 80% does not.

It's effectively impossible to prove definitively, but I find it hard to believe it's a coincidence that the share of wealth held by asset-heavy individuals shot up at the exact same time the money supply increased significantly, especially given that lower class wages were actually increasing faster than inflation and upper class wages at the same time.

[onraglanroad]

You thought that graph mirrored inflation? That $4 in 2000 was $24 today?

I find that difficult to believe.

[thehumanmeat]

My hotter take: We've been in a depression since '08 https://fred.stlouisfed.org/graph/?g=cMV

[lotsofpulp]

What if some of the population is experiencing a depression, some are in a recession, some are in stagnation, and some are experiencing an expansion?

[tonyedgecombe]

I don’t know about the US but growth in the UK has been anaemic since the financial crisis.

[gruez]

>excluding current transfer receipts

Why was this metric chosen? What does showing that current transfer receipts grew show we're "in a depression"?

[FireBeyond]

Yeah, there's absolutely a reason that we're not releasing a lot of key economic numbers and it's not because the government needs to clean house of people determined to sabotage things, and it's not because the numbers are so amazing that we have the "best economy the country has ever seen", either.

[NickC25]

this needs to be shouted from the rooftops. something drastic needs to happen or else we will be the harbinger of a large-scale societal collapse.

[UncleOxidant]

> we will be the harbinger of a large-scale societal collapse.

The harbingers are already here and have been for a while now. Harbingers are signs that things are breaking down. More like "or else we will have a large scale societal collapse".

[hackable_sand]

I've been saying this since last year too.

Sincerely, software developer turned fast food manager.

[saubeidl]

My even hotter take: This was always the inevitable result of shareholder capitalism.

The only outcomes left are either unchecked descent into fascism as oligarchs consolidate power and finish their government takeover before their current power base falls apart, or a successful socialist revolution.

This is what it's always been leading to.

[mrguyorama]

>This was always the inevitable result of shareholder capitalism.

Just capitalism. There's no actual or necessary distinction about what shape that capitalism takes.

A system where getting more money means you have more opportunity to generate more money by itself has all the feedback loop you need to consolidate over time, generate monopolies, and end up here.

Competition just doesn't happen in a free market. Actually competing, and trying to win marketshare or mindshare that way is too expensive, as there are much simpler and cheaper ways to impact a market.

Competition requires a fair market. This was fully understood by both Roosevelt trust busters, and both Teddy and FDR made big talk about "I'm not trying to kill business, I just want them to compete because that's such a force multiplier".

It doesn't take a socialist revolution. All it takes is like a gentle sprinkling of welfare and a fair and competitive market.

Granted, we have a lot of work to make the current market competitive. We've allowed so much consolidation that we would probably have to actively break up companies, we would have to nullify lots of contracts and IP rights and reduce the power a EULA can hold over you. Interoperability is necessary for competitive markets so we would have to roll back the DMCA anti-circumvention language. Improved customer rights would also help.

[SAI_Peregrinus]

> Competition requires a fair market.

Adam Smith's term in "The Wealth of Nations" is "freely competitive market". The "free market" bastardization came much later.

[b00ty4breakfast]

there is a saying that fascism is capitalism in crisis. I don't think this reactionary crisis response is restricted to capitalist economies or fascism. though. We can see this, for just one example, in the various persecutions of Jews in Europe during the middle ages any time there was a crop failure or a plague or some similar disaster.

[hombre_fatal]

I think that's mostly just HNers assuming AI like Claude Code is already penetrating the day to day work of the workforce.

"If I use, then everyone is probably using it".

Yet AI penetration is so low right now that it probably has zero role in the job market.

And it keeps us distracted from talking about the real reasons behind job opening decline.

That said, once AI ubiquity picks up within the next few years, we'll have all of the existing problems we're not talking about... plus AI. And we'll probably be even less capable of talking about the complexities of the market intelligently.

[woooooo]

I think parent comment was talking about hype vs reality rather than disagreeing with you.

"We're not hiring but AI is in the news" = "We're not hiring because of AI! Don't sell our stock!" It's independent of actual current or future AI adoption.

[A4ET8a8uTh0_v2]

Maybe. I am likely not a typical HNer, but my company actually has use of AI our 2026 goals. I am not guessing. I know majority of people in this company have those goals baked in. Now, can I suspect other like companies do the same? No. But even if they don't, it does not matter. Because the companies that don't allow AI, have people who use it anyway..

[zdragnar]

FOMO.

https://www.axios.com/2025/08/21/ai-wall-street-big-tech

Have we forgotten this? It'll find its niche, but it isn't yet a truly transformative one.

[A4ET8a8uTh0_v2]

<< it isn't yet a << yet

That is a lot pressure to put on a conjunction. It is up there along with 'it will never be'.

In all seriousness ( and some disclosure ), I like this tech so I am mildly biased in my stance. That said, I almost fully disagree with yours.

As much as I dislike Nadella, his last blog entry is not that far off. Using LLMs for stuff like email summaries is.. kinda silly at best. The right use cases may have not emerged yet, but, in a very real sense, it already has been transformative..

[hunterpayne]

"it already has been transformative.."

Yea, at being a search interface. But what else? Not that it can't be, but the failure rate for AI is absurd right now. What happens if it collapses and all its used for is answering questions on your phone and maybe better search of your emails? That seems to be a real and probably likely outcome. What then? Ironically, I think it will improve the economy because there are a lot of decisions that are on hold until we know what LLMs will be used for. Probably isn't going to be good for SEs either way.

[A4ET8a8uTh0_v2]

<< but the failure rate for AI is absurd right now.

I keep a personal log of specific failures for simple CYA reasons. I do get some, but I can't honestly say it does not seem high to me. A lot likely depends on what is defined as a failure ( to me it typically is a clearly wrong result ). But those clearly wrong results do not seem to cross 10% of output.. so about the same as average human.

[hombre_fatal]

The writing is on the wall for AI. It is coming fast and it is transformative. That your company is still trying to ramp up AI adoption and processes for 2026 supports my point.

But we've been blaming AI for a couple years now, yet I suspect it's still too early in the adoption curve to have a meaningful impact on hiring compared to more boring explanations.

[esseph]

Even if AI wasn't being used for daily tasks by general employees, it's being used by HR and staff sourcing firms to sort through applications, so it already has had a large (negative) impact on hiring.

Maybe we should do an "Ask HN" for those in HR or adjacent roles to poll for experiences there.

[hunterpayne]

"it's being used by HR and staff sourcing firms to sort through applications"

I think you are correct, but is anyone happy about the current situation? I suspect it will change and that change very likely will intentionally not involve AI. I suspect it will be an economic solution, not a technological one.

[A4ET8a8uTh0_v2]

I hear what you are saying. In a very practical sense, I have no real way to measure either of those factors and the company I work for is international so that does not allow for an easy extrapolation. I guess what it really means is: we will find out:P

[conartist6]

Really? I see H1B as the tiniest drop in the bucket compared to AI, at least in software. It's not that AI is filling 1 human role with 1 AI, it's that everyone who has a job knows that they need to keep it because the market is insanely cutthroat right now. Everyone has an AI-polished resume, and employers no longer see the value in having talented employees. Even if they did have talented employees they don't trust them enough to know how to do the work. If your employer says "I need you to start using AI" they may as well be saying "I don't trust you to know what's worth is worth your time." I see even a lot of people who have jobs as acting in a way that's consistent with on the verge of being fired, which I think is most of the real "value" of AI so far.

[evnp]

Same here, basically word for word.

[tayo42]

What industry and roles?

[A4ET8a8uTh0_v2]

Finance, but tech adjacent. I am not super comfortable going into more detail.

[strangescript]

yes, AI isn't penetrating those fields with high job losses at all

[master_crab]

AI isn’t penetrating but all the money needed to invest in the economy has moved over. Maybe that’s also part of the problem

[potato3732842]

Bespoke AI has not gotten everywhere but generic AI absolutely has.

The workforce is happily making themselves more efficient by using AI on their phones for what used to be multi step look it up in the literature or your supplier's catalog or consult the instructions or read the rules process when performing cookie cutter tasks they know but don't remember exact specifications for.

[acdha]

Do you have a source for that? Everyone I know who works outside of tech is complaining about how AI is making their jobs harder because it’s wrong so much of the time that they’re spending more time correcting it than it saves, and it’s been a boon for cheaters looking to remove obvious tells from their attacks.

[potato3732842]

I'm talking about people who shower after work not people who shower before work.

I have no doubt that people who are having AI foisted upon them by admins at the behest of someone else hate it.

They use AI as basically a leveled up version of the summaries google used to provide for certain search types. Saves them a bunch of obnoxious clicking around on the internet or in software that was never designed for mobile or to make giving up the kind of info they're seeking easily.

[acdha]

That’s usually also followed shortly by learning that you can’t trust the results or you’ll be making customers whole.

[potato3732842]

These people usually know enough to know when it's "not quite right". Same "don't trust the docs" story that existed in many workplaces long before AI

An example I saw recently was someone asked for a modern equivalent of a grease that's no longer made/relevant and it replied back with some weird aviation stuff. The "real" answer wound up being "just use anything, the builders intent in specifying was to prevent you from using tallow or some other crap 100yr ago"

[Cornbilly]

Sources for this?

[DetectDefect]

Hot take? Half of the US is formally in recession already.

https://fortune.com/2025/10/09/america-feels-recession-state...

The economy is completely fucked and we are in a race to steal and horde all the data before people catch on.

[JumpCrisscross]

> My hot take: We’re already in a recession

Personal-savings rate says we're heading into a recession, but aren't yet in one [1]. Labour-force participation, on the other hand, suggests we may be [2].

Assuming we go into another shutdown at the end of the month, none of this may be clear until well into the autumn.

[1] https://fred.stlouisfed.org/series/PSAVERT

[2] https://fred.stlouisfed.org/series/CIVPART

[esbranson]

The prime age (25-54 years old) labor force participation rate disagrees.[1] It's almost the highest it's ever been and steady.

[1] https://fred.stlouisfed.org/series/LNS11300060

[FatherOfCurses]

Also RTO mandates as a way to cover up for layoffs.

[zeroonetwothree]

Q3 GDP was +4.3% We will know Q4 in a bit, but the projection is +2.7%

Hardly a recession

[tills13]

Remove AI data center spending from that.

[eru]

> - layoffs > with AI we can do more with less people

That's pretty silly. Just look at the unemployment rate, not at the headlines.

[bpt3]

Eh, layoffs also declined, consumer spending is up YoY, and we all know about the investments being made in AI that very well might be propping up the economy.

AI, when effective, is deflationary because it allows for similar productivity at a lower cost. That's what you're describing above, not a shadow recession that is being papered over by claims of AI use.

To my point: You could have replaced "AI" with "computing" for most of the last 50 years and been left with the same argument.