Most business leaders, analysts, and economists agree that artificial intelligence will have a significant impact on the future of the US economy. Economist Glenn Hubbard believes that the US is not adequately prepared for the disruptions that will come with the AI revolution. The focus on economic growth has been overshadowed by concerns about disruption in the job market and communities across the country, which have been exacerbated by technological change and globalization over the past few decades.
The rapid advancement in AI technology will bring about even faster disruption, with significant job losses expected within a short timeframe. Hubbard emphasizes the need to rethink how society manages change and supports individuals through this transition. While major CEOs are implementing AI in their businesses, government intervention is necessary to help workers transition to new roles. Public policy measures such as arming community colleges and fostering public-private partnerships have been proposed as solutions to help workers adapt to the changes brought about by AI.
While the Biden administration’s CHIPS Act and Inflation Reduction Act have increased spending and stimulated growth, Hubbard believes that a greater focus on research and development is needed for future economic success. He advocates for more investment in basic research that could pave the way for the next generation of chips and technological advancements. Balancing the need for economic growth with concerns about inflation and deficits will require policymakers to make difficult choices, such as raising taxes or cutting spending.
The long-term consequences of neglecting economic growth in favor of managing disruption could lead to slower productivity growth and a decline in social support for the capitalist system. Hubbard warns that failure to address these issues could ultimately lead to the deterioration of the US economy. He calls for a shift in focus towards supporting communities and boosting educational opportunities to ensure that people are equipped to thrive in the age of AI.
Ultimately, the failure to prioritize economic growth and address the challenges brought about by AI could have far-reaching consequences for the US economy. Social support for capitalism may continue to decline, and communities may feel neglected by the current economic system. Hubbard stresses that investing in research, education, and community support is crucial for ensuring long-term economic prosperity. Without proactive measures to manage the disruptions caused by AI, the US risks falling behind in the global economy and undermining the economic prospects of its citizens.
