Three Futures
AI will soon do most jobs better and cheaper than humans. What happens next depends on one question: who owns the machines?
This scenario is based on simulations of the U.S. economy using a 100+ parameter model assuming significant AI-driven layoffs.
Welcome to the AI Apocalypse
Workers get laid off, spend less. Demand drops, more layoffs. A downward spiral. Government tries the usual tools—unemployment benefits, corporate bailouts, stimulus. But AI layoffs never stop. And bailout money spurs machine activity, not human employment.
How It Starts
- •25% of workers permanently replaced by AI over 5 years—2% in Year 1, ramping to 8% in Year 5 (possibly conservative)
- •Demand spiral causes an additional 10–25% job loss on top of AI displacement—falling spending forces more cuts
- •Government responds with normal tools—unemployment benefits, stimulus, retraining—not structural changes. Economy eventually hits a low floor
The Downward Demand-Employment Doom Spiral
The Doom Spiral
Cycle repeats
The demand doom spiral: each round of job cuts leads to less spending, which leads to more job cuts.
The Critical Limitation
How It Ends
- •Government's tax base collapses—fewer workers, less income tax; struggling businesses, less corporate tax
- •Borrowing costs skyrocket—lenders lose confidence in a government with massive deficits and no recovery path
- •Printing money triggers inflation that eats away at whatever aid remains—prices rise, incomes stay flat
- •Government hits a wall, must stop spending—the floor falls out, demand spiral resumes with nothing to stop it
- •Hyperinflation plus end of government support = true collapse—mass homelessness, hunger, social unrest, breakdown of basic services
Hard to imagine. But without radically new policy responses, this is the path.
Possible Timeline
AI Displacement Begins
First 6% of workers permanently replaced. Economy absorbs initial shock.
Displacement Accelerates
25% total replaced. Unemployment spikes, spending drops sharply.
Demand Spiral Kicks In
Less spending → lower demand → more layoffs. Self-reinforcing collapse begins.
Permanent Depression
Total job loss reaches 40-50%. No recovery mechanism. Jobs gone permanently.
Government Fiscal Collapse
Tax base gone, borrowing exhausted, money printing triggers inflation. Safety net collapses. Floor falls out.
Failed State
Mass homelessness, food insecurity, breakdown of basic services. Regional fragmentation. The US as a functioning nation-state ceases to exist.
Projected Outcome
Unemployment
68%
GDP Change
-75%
Government Debt
Unserviceable
Social Stability
Collapse
These aren't predictions. They're explorations.
The simulator is under development. When it's ready, you'll be able to change the assumptions, adjust the parameters, and see what happens.