00:59:43 · Casey Handmer
[00:59:43] S1: The question is, do these agencies operate with equivalent efficiency or productivity of the private sector? And the answer there is no. Absolutely not. Like, not even close. Not even within a factor of two. In some cases, not even within a factor of 10. And given that... You know, I read the math a couple of months ago. I took out financial data and plugged it into an LLM and and said, hey. Figure out what's going on here. So I don't know. In the grand scheme of things, like, Collisons have put a few million dollars into this business. Okay? That's that's public information. They wouldn't mind me saying that. I'm proud to be associated with them. Whether they're proud to be associated with me, one can never tell. But the Collisons have put some money into this business. And the Collisons are very wealthy. How do they get the money? They built an extremely valuable business themselves. That business is a huge benefit to this country in particular, right, and all the other businesses. Like millions and millions of businesses depend on They're probably responsible, I think they tried to estimate this at some point, for measurable amounts of GDP increase are attributable to Stripe decreasing friction on transactions. Okay? We should throw these guys a parade. Okay? Pin a metal on them and make statues in Silicon Valley of them, you know, a 100 feet tall. Okay? But like any business, they pay tax. They pay a shitload of tax. They pay all kinds of tax. They had to move to South San Francisco because San Francisco was like, we're gonna charge you a transaction tax. Genius move. Okay. So they had to pay... They pay a shitload of tax. The Collisons, like most rich founders, are probably not paid much in the way of salary, but they have equity and they can borrow against the equity. They still pay tax on that. Then in addition to payroll income tax on, some of that money gets invested in companies like ours, and then we pay tax. Okay? So I ran payroll on Monday, and I'm paying on the order of $354,100,000 dollars a month in payroll. And of that payroll, almost half of that goes into either payroll tax or income tax. So the actual amount of like... And then when my employees go out and like try and rent a building to live in around here or buy food or something, they're paying tax on that as well.
01:01:55 · Casey Handmer
So if you think like what we want here is the net economic surplus to make it from the Collison's hyper productivity into actual physical things that my employees need to survive, what fraction of that value gets siphoned off by the government, it's like 70%. It is unbelievable how much just disappears. And you say, well, why is it that this neighborhood here is no longer full of like vibrant businesses building state of the art aircraft that allow... Enable people to fly around the world? Could it be that two thirds of the net value between the source of capital and the goods and services that the the people actually doing the actual work need in order to survive is just yoinked out of the system along the way. It's it's nutty. It's absolutely crazy. I'm I'm... I'll give one more example. I'm I'm blessed to be married to a very talented woman, Christine, and and she has always and continues to earn more than I do, which is my own damn fault. I set my own salary, but, like, it's not even close. And and so I I I asked Croc the other day, like, in our net family income, does just my income, like, cover the tax or something? And Croc was like, your income covers less than half of the tax. And I was like, I should just retire. My wife should just retire. We're we're, like, comfortably middle class. We effectively buy the company a luxury car every couple of months. Like, it's kinda nutty. And and the thing is maybe for some people maybe some people it's different, but to me, I feel like The US people are no longer getting out of the government what they were putting in.
01:03:25 · Ty Morse
[01:03:25] S0: Do you think that civilizations just have to do a hard reset every couple hundred years to start situation fresh?
01:03:32 · Casey Handmer
[01:03:32] S1: Like, this year, we're in the AI takeoff. We're in the the singularity. And, like, this is thing that, like, you can you can kind of argue this way or that way about demographics, this birth rate, that tax rate, this, you know, offensive drone warfare that all this stuff is swamped by hyper intelligent AIs. And so the the correct question to ask really is what is... It's it's kind of like... You know, New York City was in a crisis over a century ago due to their inability to dispose of a horse manure from people using horses to try... Tow things around the place. And even in the Second World War, the German army depended on horses to drag artillery pieces from place to place. Right? It was not fully mechanized. And the answer was not like, oh, taxation on horses or something. Right? The answer was we invented new technology, a motor car that has its own problems but its own benefits, and here we are. So we're literally in the process right now of not so much changing this legacy tax and spend economic system, but, like, just superseding it entirely. Yeah. So if you think, like, let's run the block ten years forward in a in a good outcome scenario, 90% of the net benefit that accrues to humans will be downstream of AI, and AIs will be, you know, incorporating their economic system in a way that's very different from the way that FDR's team and, you know, the presidents or the congresses around that time decided that they were going to essentially fund the operations of the government by appropriating a fraction of everyone's labor through income tax. Right? Tax makes sense if if most of the people in your economy are working for businesses that run payroll where they're, turning screws in a factory or something, which was, you know, reasonably descriptive of the of the of the twentieth century. But most of the economic activity in our economy today is not that. You know, The United States still does a lot of manufacturing, but it's not the nexus of economic productivity here. And in the future, won't be either. Most of the economic productivity will be machines emitting streams of ones and zeros in low Earth orbit.
01:05:30 · Ty Morse, Casey Handmer
[01:05:30] S0: Wanna talk about Starship? [01:05:31] S1: Starship. [01:05:32] S0: Okay. Let's do Starship. Let's let's talk about Starship. [01:05:33] S1: So cool. [01:05:35] S0: It's extraordinarily cool. On the Louisiana build out, I think it's at, like, 12 towers [01:05:41] S1: for that. Is that a 12? I mean, who really knows? [01:05:43] S0: It's some... Somewhere around there. [01:05:44] S1: But [01:05:45] S0: I think that there's, like, some constraint for Starbase where they can only launch so many Starships a day.
01:05:45 · Ty Morse, Casey Handmer
[01:05:45] S0: I think that there's, like, some constraint for Starbase where they can only launch so many Starships a day. [01:05:53] S1: Well, Elon's in the process of undergoing regulatory arbitrage. So the impression that I get is that the Rio Grande Valley authorities having jurisdiction were perhaps getting a little bit cozy or comfortable with their little monopoly on on Starship development and the enormous revenue and so on that that's brought to that area and perhaps becoming a little too extractive or potentially having the ability to become too extractive. And so how do you make sure that you keep that relationship healthy? You create a a... An escape hatch that is nonzero cost and non infinite cost. And then you can now run the regular garbage charge. And the Louisiana governor... It was an... Actually, an announcement video was kind of interesting. Louisiana governor had the name tag because no one knew who he was, but Elon brought the bodyguards. That that, you know, if push comes to shove, he will do to Texas what he did to California and say, I'm taking my business elsewhere because, like, you can shear the sheep, but you can't skin them. Right? If you shear the sheep, it makes more wool. If you skin it, it dies. So you don't wanna cut too deep. [01:07:01] S0: I guess he wants to get to something like 10,000 flights a year in a very short time.