As much as the AI bros would love to tell you otherwise, 70% of the economy is consumer-based.

So let's assume the tech bros are right. "lol AI is coming for everyone's job." This is wildly unrealistic, by the way, given the massive unpopularity of AI and its insanely high error rate and insane cost, and the economics of AI make no sense (it is getting cheaper because they are having increasing difficulty attracting customers, even though the costs are ballooning).

Cool cool. So they don't have money to spend, they drop their life insurance, they withdraw their 401(k)'s, their savings, etc. Guess how this whole AI bullshit is financed? Your money. :D The bubble pops. Financial institutions implode. More jobs lost. Economic spiral.

If the tech bros are wrong, and the AI bubble pops, well institutions are so leveraged, that they start tightening belts, credit access becomes almost impossible during one of the already most unaffordable periods in modern history, businesses implode, economic spiral.

Either way, there is no real scenario where the economy comes out of this okay.

The real, honest economists who aren't smoking on the bullshit pack as usual are sounding the alarm right now bigtime. Like they're trying so hard to jump up and down and be seen screaming "NONE OF THIS MAKES ANY FUCKING SENSE" and "THIS IS 2008 BUT WORSE" but they just get ignored by the press...

By the time the press starts saying shit like "oh, this is... bad." That is when it is already in freefall.

Businesses are already massively leveraged, which is a fancy way of saying "heavily in debt."

For 18 years, we have had near-zero interest rates. This has resulted in huge amounts of corporate debt, much of which has been paid with additional loans.

The real estate market is hugely overleveraged and has already begun to crack. New construction is slowing down. Some sites have stopped construction. Contractors have already sounded the alarm of defaults on some job sites. Guess what? These are backed by banks too, and being propped up by credit. What happens when the banks don't have credit to give?

Sure, that sounds lovely. But when they default, the banks suddenly have billions in liabilities they can't hide anymore. They stop getting paid. They have tons of property they can't offload.

When the banks crack, new credit is impossible. When that happens, new businesses basically can't stop. Regular people can't buy homes because they can't get credit either. People can't get cars. People who were surviving on credit card debt because of the huge cost of living suddenly find themselves up shit creek.

And it's easy to say "well fuck 'em" but the problem is... they get bailed out. Every time. We do not. We suffer. We deal with the mass layoffs. We deal with the economic stagnation for years. We deal with the loss of our homes. We deal with our landlords defaulting and being unable to meet property tax obligations (that one is Really Bad) or maintenance needs.

When your landlord defaults... that sounds fun? Okay. What's less fun is when the sheriff shows up to your house after a year or two of non-payment and tells you to get the fuck out because they didn't pay the property tax because your landlord is completely hollowed out. Or your landlord is literally a corporate landlord and is now in liquidation, but there are no buyers. So you're just stuck.

The amount of investment in AI makes the subprime mortgage crisis look like a $20 loan to your friend.

The financial instruments being used to fund AI are largely the same as the ones that brought the economy to its knees in 2008. Credit default swaps, circular financing, off-books SPVs, all obscuring the fact this is basically your retirement fund and savings accounts being used to fund this behemoth.

This is going to be really, really bad.