Yale Budget Lab warns AI cuts US debt only by abandoning displaced workers

4 articles · Updated · Fortune · May 6

The study says moderate AI adoption lifting annual labour productivity to 2.5% could slow and eventually shrink debt-to-GDP, but not keep debt at today’s level if worker support spending rises.
US debt has reached $39 trillion and 100% of GDP, with interest costs at $88 billion a month, while restoring fiscal sustainability within 30 years would require about $827 billion in tax rises or spending cuts.
Researchers also warn AI could shift taxation from labour to more lightly taxed capital and push up interest rates, offsetting fiscal gains even if productivity improves as hoped.

Can AI solve the national debt without sacrificing the workers it displaces?

If AI grows the economy but shrinks tax revenue, how can governments avoid a fiscal crisis?