The company published earnings for its fiscal second quarter on Wednesday, a period during which it improved its cash flow and narrowed its net loss to $335 milliona dramatic 24% improvement from a year earlier.

While sales and revenues declined from the same period in 2022, the company said it was set to achieve positive cash flow by the end of the fiscal year in June, and its revenue forecast for the next quarter exceeded analyst expectations.

If youve been wondering whether or not Peloton can make an epic comeback, this quarters results show the changes were making are working, CEO Barry McCarthy, who has been at the company for a year, said in a letter to shareholders on Wednesday.

This was by far our best quarterly performance in my twelve months with Peloton. Most of the executive team is also relatively new to Peloton and new to their teams. Given what weve already accomplished, imagine whats possible once the team finds its groove.

Peloton shares gained around 20% during early trade on Wall Street on the back of its second-quarter resultsbolstering the bullish stance investors have taken on the former pandemic darling stock since the beginning of the year.

Pelotons business performance was boosted by soaring demand for at-home workouts at the height of the pandemic, with its stock surging 350% and revenues jumping 172% in a single quarter.

However, the company and its stock suffered a stunning fall when the momentum couldnt be sustained.

At one point, a top stock research firm warned Peloton shares could plummet all the way to $0. While that hasnt happened so farand the companys stocks has rallied in recent weeksshares of Peloton are still around 90% less valuable now than they were at their peak in late 2020.

No longer on the brink of extinction

In an interview with Bloomberg on Wednesday, McCarthy insisted Peloton had been revived thanks to its ongoing turnaround strategy, which has involved mass layoffs, second-hand equipment sales and executive reshuffles.

We were on the brink of extinction, and thats no longer the case, McCarthy told Bloomberg. Weve put to bed questions about the viability of the business.

Simeon Siegel, managing director of equity research at New York-based BMO Capital Markets, told Fortune on Wednesday that despite McCarthys optimism, a turnaround was not the same thing as a growth story.

Peloton has fixed its greatest problem, he said. And, at least in my opinion, there are no existential threats. To managements credit, Peloton has improved its fixed cost structure, but it is now beating revenue expectations but missing gross profit dollars.

He added: Peloton is a great product with a fantastic community. That doesnt mean its reach is limitless.

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As part of that plan, Republicans are demanding substantial spending cuts and budget reforms in exchange for lifting the debt ceiling this year putting the U.S. at risk of default.

But a look at the numbers and the history shows just how difficult balancing the budget will be.

Doing so requires the federal government to generate enough income to pay for all its spending. The U.S. has managed this feat only twice in the past 60 years and both times involved raising taxes, something Republicans are loath to do. President Lyndon B. Johnson managed to do it in 1969, and President Bill Clinton created a surplus that ran from the fiscal years 1998 to 2001, when he left office.

As a member of the Clinton administration in the Commerce Department from 1997 to 2001, I participated in achieving that rare balanced budget and understand the obstacles to delivering a repeat performance. A quick look back at how we did it, along with how much has changed, shows that Republicans are unlikely to manage a similar performance.

How Clinton balanced the budget

When Clinton took office in 1993, the budget deficit in the previous year was just under 5% of gross domestic product, and the nonpartisan Congressional Budget Office predicted a bleak fiscal outlook.

Clintons balanced-budget recipe was a mixture of higher revenues and lower spending, with help from a booming economy. In his second term, he also negotiated a bipartisan budget deal with Republicans.

After campaigning on a pledge to cut the deficit, Clinton raised taxes on the wealthy during his first year in office. He introduced higher top personal income tax brackets, raised corporate taxes, increased taxes on Social Security benefits, added 4.3 cents per gallon onto gas taxes and eliminated a number of itemized tax deductions. On the spending side, Clinton took advantage of the peace dividend that followed the collapse of the Soviet Union to reduce defense spending from 4.3% of GDP in 1993 to 2.9% by 2000.

These measures helped slash the overall deficit to 1.3% of GDP by the end of Clintons first term. Thats the smallest it had been in 22 years.

The higher taxes invited pushback from Republicans, who gained majorities in the House and Senate in 1995. Clinton wrangled continually with then-Republican Speaker Newt Gingrich, who forced a government shutdown that same year.

As part of budget negotiations, Congress eventually passed the Balanced Budget Act of 1997, which retained Clintons original tax increases but cut capital gains taxes and reduced spending on Medicare and Medicaid. Meanwhile, the economy, fueled by a tech boom, expanded rapidly during Clintons second term.

Higher tax rates on the wealthiest Americans, strong economic growth and continued restraint in government spending produced a budget surplus of US$69 billion in 1998. The surplus peaked in 2000 at $236 billion before falling to $128 billion in 2001. The surplus which hasnt been seen since allowed the U.S. to pay down the national debt by over $450 billion.

Lessons for today

The lesson for Republicans today is that if they are serious about balancing the budget, it will require some very unpalatable choices.

On the spending side, so-called entitlements mandatory programs such as Social Security, Medicare and veterans benefits now account for almost two-thirds of the federal budget, compared with less than half when Clinton took office. Funding for these programs is set by formula, making it difficult to change. And the population of Americans 65 or older has grown by 32% since 1993, increasing demand for entitlements.

Defense spending takes up another 14% of taxpayer dollars, greatly exceeding every other item in the so-called discretionary budget, which includes everything else from transportation and energy to airline traffic control and national parks.

The U.S. spends 8% of the budget simply paying interest on the national debt. This percentage hasnt changed much, but the debt itself has soared from $4.5 trillion in 1993 to $31 trillion today mainly because of massive tax cuts during the Bush and Trump administrations, costly wars in Iraq and Afghanistan and vast public spending to address the 2008 financial crisis and the COVID-19 pandemic.

Now that historically low interest rates have come to an end, the U.S. will be forced to devote a bigger slice of the pie to paying interest.

The policy nonprofit Committee for a Responsible Federal Budget recently estimated that if spending on defense, veterans, Social Security and Medicare were off the table, Congress would need to reduce all other spending by 85% to get to an overall balance. In other words, simple arithmetic means it is not feasible to achieve anything close to a balanced budget without addressing military spending and entitlement programs.

Reducing military spending is always controversial and many Republicans (as well as some Democrats) would resist such cuts but especially so at a time when the U.S. is ramping up military aid to Ukraine and the Pentagon perceives a threat from China. Its the very opposite of the Clinton-era peace dividend.

Cutting mandatory spending would require significant reforms. The U.S. has one of the youngest minimum retirement thresholds in the world, at age 62, compared with 65 in Canada and 67 in Britain and Germany. Even France may soon have a higher minimum retirement age of 64 though the current protests there over increasing it from 62 illustrate the political perils of such a change.

Can they do it again?

Certainly, opportunities do exist to close the gap between income and spending.

The Congressional Budget Office has released a report outlining 76 options for reducing the deficit. But many of the ideas require further hard choices, such as rolling back some or all of the last three tax cuts, increasing taxes on the wealthy, ending or curtailing tax deductions and adopting a consumption-based value-added tax or a carbon tax, as well as fundamental reforms to entitlement programs.

Unfortunately, Congress shows limited appetite to tackle such issues.

Back in 1997, after the smoke cleared, both the Clinton administration and the Republicans in Congress were able to claim some political credit for the resulting budget surpluses. But crucially both parties recognized that a deal was in the best interest of the country and were able to line up their respective members to get the votes in Congress needed to approve it. The contrast with the current political landscape is stark.

The Republican Study Committee, a bloc of more than 160 conservative lawmakers, released a budget blueprint in June 2022 that promises to balance the budget in seven years. The plan proposes trillions of dollars in spending cuts, many of which would fall hardest on low-income Americans. These include shrinking Medicaid, paring veterans benefits and raising the age for full Social Security retirement benefits from 67 to 70. It also calls for higher military spending and further tax cuts which would require even more draconian cuts to core safety net programs.

It would also lock in the Trump tax cuts of 2017 the opposite of what the Congressional Budget Office recommends or what Clinton did in the 1990s to secure a balanced budget.

Without a credible Republican deficit-cutting plan on the table, I believe that the odds favor a protracted stand-off over the debt ceiling, which could tip the precarious U.S. economy into recession.

While Congress seems highly unlikely to allow a debt default, this brawl would waste time and energy that could be better spent on figuring out how to strengthen programs like Social Security and close tax loopholes that drain revenue.

Balancing the budget is not an end in itself. Most economists agree that governments should reduce public debt during periods of prosperity and run deficits to assist people when the economy is weak.

The U.S. was fortunate in the late 1990s to enjoy a buoyant economy that enabled Congress and the president to achieve a fiscal surplus. What the country needs now, in my view, is not more quick fixes but a sustainable pathway to stabilizing the national debt. That requires growing revenues and reducing nonessential spending in a responsible way.

Linda J. Bilmes is Daniel Patrick Moynihan Senior Lecturer in Public Policy and Public Finance, Harvard Kennedy School.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

At Davos, CEOs were quoted as saying that they just want ESG to go away and a new phrase has even been coined: green hushing.

For statistical confirmation, look no further than a global survey that my company did of 2,000 CEOs. We found that most businesses (84%) are prioritizing commercial objectives over sustainability even though almost all (95%) agree that sustainability is either a top or high priority.

In the survey, CEOs (82%) even said that they would accept regulatory penalties to avoid taking on sustainability initiatives because of the cost and difficulty of delivering such projects.

As a CEO, I understand fully the importance of serving our shareholders with a strong financial performance every quarter.

However, there are costs to inaction. Beyond the monetary penalties of non-compliance, most leaders (84%) believe that without a clear sustainability strategy, they are also likely to lose staff.

Companies dont have to be torn between commercial and sustainability objectives. The right application of mission-critical technologies can make enterprises more connected. When this happens, and data is free to move around and be accessible to everyone who needs it, we will start to see progress in many areas at once.

Insights into how a company can streamline its business process and reduce energy use are not only good for the environment but also for profitability. Companies can fulfill their sustainability goals by increasing efficiencies, such as monitoring and reducing energy consumption, tightening industrial processes, and improving logistics for tracking and asset management.

Cloud, data integration, and edge computing are delivering visibility across expansive operations via the Internet of Things (IoT)sensors and devices capable of making decisions about the data they capture.

The promise of constant connectivity that integrates devices across a range of functions, as well as monitoring and controlling devices at multiple sites, has become a staple of sustainable operations.

In fact, IoT is being used now like never beforeand it has even greater promise for the future as companies continue to digitize their operations. The global IoT market is projected to grow from $478.36 billion in 2022 to $2,465.26 billion by 2029, at a CAGR of 26.4% in the forecast period

One example is something as basic as compressed air, which is essential to industrial productionpowering machinery, valves, and hand tools in industries from manufacturing to mining and power generation.

It takes electricity to compress the air. Thousands of liters of compressed air can be wasted because consumption is not monitored, and leaks go undetected. In a worst-case scenario, reports say as little as 8% of the total energy supplied to a compressor is converted into useful energy to do the work at the point of use.

Improved efficiency in the generation and use of compressed air is an important source of energy savings and increased sustainability.

Another example of how IoT can make businesses more profitable and sustainable can be found a world away in Australia, where the drought-prone country faces numerous challenges with its water supply: undetected water loss and theft, lack of visibility in usage data for water consumers, and high costs and compliance issues due to inaccurate data.

With IoT, average water usage per customer is being substantially reduced by identifying leaks and water theft and promoting water conservation with user-friendly apps.

The truth is that improving sustainability improves profits because it makes operations more efficient. Investors are looking for clear strategiesand so are employees. There isnt a shortage of targets and ambition.

However, there is a shortage of real plans and tangible actions that are really going to get organizations there. Lets use technology to help us achieve our goals.

Sanjay Brahmawar is the CEO of Software AG.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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