Faced with mass job loss from AI, governments are unlikely to seize assets from the wealthy. The politically easier path is to print massive amounts of money for social support, preserving the existing capital structure while devaluing the currency.
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A rapid, significant (e.g., 5%) spike in unemployment over a short period (e.g., 6 months) due to AI would trigger an immediate and massive political and economic response. This would be comparable in speed and scale to the multi-trillion dollar stimulus packages passed during the COVID-19 pandemic.
The AI industry and the US government both require trillions in funding. This creates a paradox: the more successful AI becomes, the more it erodes the white-collar tax base by automating jobs, forcing the Treasury to borrow even more and intensifying the competition for scarce capital.
Federal Reserve Chair Jerome Powell stated that after accounting for statistical anomalies, "job creation is pretty close to zero." He directly attributes this to CEOs confirming that AI allows them to operate with fewer people, marking a major official acknowledgment of AI's deflationary effect on the labor market.
Technologies like AI and robotics create massive deflationary pressures. To counteract this, governments will be forced to print more fiat currency, debasing it. This macro environment makes a scarce, decentralized asset like Bitcoin a critical tool for corporations to preserve capital and protect their balance sheets from inflation.
In an unpredictable AI-driven job market, the most reliable path to financial security is not a specific skill but owning assets. This allows individuals to participate in the massive wealth generated by the technology itself, providing a hedge against inflation and potential job displacement, and avoiding a future of dependency on government assistance.
Political demands that new technology must benefit the specific workers it replaces are fundamentally flawed. This logic ignores progress. The goal shouldn't be to preserve obsolete jobs but to ensure technology benefits civilization as a whole by creating abundance while managing the difficult labor transition.
The enormous market caps of leading AI companies can only be justified by finding trillions of dollars in efficiencies. This translates directly into a required labor destruction of roughly 10 million jobs, or 12.5% of the vulnerable workforce, suggesting market turmoil or mass unemployment is inevitable.
Unlike the private sector, government often focuses on offering employment rather than driving innovation. This inefficiency creates a buffer against AI-driven job cuts, making public sector roles paradoxically resilient, despite being a catastrophic waste of taxpayer money.
As AI gets exponentially smarter, it will solve major problems in power, chip efficiency, and labor, driving down costs across the economy. This extreme efficiency creates a powerful deflationary force, which is a greater long-term macroeconomic risk than the current AI investment bubble popping.
Since taxing profitless AI companies is impossible, a new system is needed. Instead of redistribution, money creation itself must be re-engineered. Capital could be generated and injected directly to individuals for simply existing and participating in the economy, fundamentally changing how money enters circulation.
