Quote of the Day
The only way to get us out of the debt crisis and prevent America from going bankrupt is AI and robotics.
Elon Musk
November 27, 2025
Elon Musk Warns ‘The Only Way to Get Us Out of the Debt Crisis’ and ‘Prevent America from Going Bankrupt is AI and Robotics’
This is to go with yesterday’s QOTD.
I do not know if Elon is correct or not. I suspect Elon knows that he doesn’t know that AI and robotics will actually work. I find the assertion plausible. But there will never be a proof. It may be that AI and robotics will do the job, but going down that path means we will not fully commit to any of the other paths, hence that the assertion of it being the only way cannot be tested.
I also find the assertion that is no way out plausible. We just don’t know. And don’t know how to figure it out prior to just trying it. The problem is that not only is our economic system a very complicated issue with many non-linear feedback loops, but it is also not repeatable.
Because of this no one on the planet can successfully defend a claim that an accurate model exists. Furthermore, I posit that no one will ever be able to accurately model the economy. I make this claim because the existence of an accurate model will itself be the addition of still another variable that the model must take into account. This addition of another variable disrupts the model.
Think of it this way, if people know the future, they will change their behavior to take advantage of that knowledge, which changes the future yet again. And it is not just one person who changes their behavior. It will be billions of people, millions of organizations, and thousands (including national, state, and local of the entire world) of governments. Each of these feedback channels, on their own, can cause the model to predict a different outcome. Each tweak of the model will require more tweaks once the output is known and feedback comes in. Only if the feedback has a lower amplitude for each tweak will the model reach equilibrium. And this is just for the design of the model. Running the model has the same type of problem. And the designers of the model have to do this for all practical situations.
In classical control system design this is described as the loop gain being less than one. This is requited to have a stable system*. To make the problem readily solvable the system model is generally limited to something no more complicated than linear differential equations. With the massive number of feedback channels in our economy, nearly all of which are nonlinear, you will have an incalculable number of opportunities in the N-dimensional space (with an extremely large N) for there to exist unstable situations. I assert such a model will not be possible in my lifetime and perhaps not ever.
We are going to have to take aim in a particular direction and roll the dice to find out if we chose a direction that has a solution.
* This is a necessary condition. It is not a sufficient condition. There also are requirements on the phase/time-delay of the feedback, but that is beyond to scope of this discussion.
Very Hayekian. The economy, like war, is very dynamic. There are always 2nd, 3rd, 4th and nth order effects.
When reading Joe’s comment, I was reminded very strongly of Asimov, Hari Seldon and psychohistory.
(And, huh. It’s been a minute since I’ve read those. Maybe I should add them to the queue again.)
I was thinking the same thing.
Interesting. I read the series, but it was a very long time ago. Perhaps it is time to read it again.
“The only way to get us out of the debt crisis and prevent America from going bankrupt is AI and robotics.”
Elon Musk
And from Karl Denninger we have;
“Gee, go figure. IBM’s CEO has done the math.
Napkin numbers here — you blow $8 trillion (announced expansion) that means you need $800 billion a year in OPERATING PROFIT (that is spendable cash) to cover the interest across the board on that.
Ain’t gonna happen and the issue with all of the “large model” stuff is cost. That we can do a thing doesn’t mean there’s a profitable business doing it. There isn’t.”
And something we forget in the calculation is that today’s business model from government to retail is a “theft model.”
And all the machinations of today are desperate attempts to save the fraud to which we have become so accustomed.
Anti-trust, collusion, and outright fraud are used to “make money.”
None more abused than the medical system which is bilking us for most of our deficit. Or say, the Japanese carry trade. Plus, derivatives.
And a government that has bought in (with the full faith and credit of our country and great-grandchildren) lies such as man-made climate change, or, “we need abortion to get rid of lower-class people”. And in the same breath say. “We need to import lower-class people to work.”
And a thousand other BS scams we call the economic system of today.
No model is workable under conditions of fraud, especially top to bottom fraud.
At present the only path is for hyper-inflation to pay off the debt. (Zimbabwe bucks). Coupled with some weird ass maneuvers through bitcoin type securities backed by future gold. And some type of heavy-handed EBT system to keep the masses from breaking out axe, torch, and pitchfork.
The model our forefathers laid down was as close as we can get to an honest system. And maintain a government at the same time.
Congress has the power print/coin money and regulate the VALUE of existing coin. States are only allowed to collect gold and silver coins for their taxes levied. As in, “no state shall make/allow anything but gold and silver coin a tender in payment of debt”.
But no matter. If fraud is not prosecuted but allowed run its course. No system will work, ever. The present one. Or any other that will be devised.
For the unintended consequences of fraud are always collapse of those being robbed. Thus no one to rob anymore.
IF AI increases productivity as much as it’s proponents say, it will destroy society because there won’t be enough good jobs to go around, and that will nuke the marriage/dating market, and it’s straight to Mouse Utopia 25, not Star Trek universal abundance. Men need work for meaning, and TPTB won’t allow their elite position be threatened. It would be very bad, baring major religious revivial.
AI/Robotics may be our savior. But countless Sci Fi authors have showed countless ways they could more likely be our hell.
Elon’s perspective is interesting, but I think the solution might lie in a combination of things—AI, better economic policies, and perhaps a rethinking of our values around consumption and debt.
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Most of the nation’s problems could be solved by killing everyone to the left of Marco Rubio.
Citation needed.
Do you have a model for that?
Mass murder has a poor record of improving society.
Not mass murder, but imprisoning large numbers of people seems to be improving society in El Salvador.
Yup, and like Burkele said.
The first thing you have to do is get rid of the corrupt judges, or they will block every reform you try.
I haven’t been following El Salvador, but my guess is the people going to prison are selected for their violent crimes rather than their political views. As much as I despise socialists, communists, and Nazis I think it is counterproductive as well as immoral to execute them prior to having infringed, or appear about to infringe, upon the rights of others.
The Federal reserve employs dozens (hundreds?) of PHD economists from the world’s best universities.
How good is the Fed’s track record in “guiding” the economy??
The obvious answer, all by its lonesome, should tell you all you need to know about economic models; they are worthless garbage disguised as high powered mathematics which model economic systems not of this universe.
The arrogance of these economists is breathtaking; “guide” an economy worth trillions, with billions of financial transactions on a daily basis involving people who oft times make decisions totally at odds with the “mechanistic” behaviour assumed in all economic models; are you kidding me??
For how many years were economists arguing about the causes and longevity of the Great Depression??
Why weren’t economic models able to predict the dot-com bust in 2000 or the financial meltdown in 2008??
As for the 2008 disaster, recall that just a few short months before the worst economic dislocation since the Great Depression, Ben Bernanke (MIT Phd; Princeton econ prof and Fed Chairman) proclaimed that the housing crisis was confined to housing and would not affect the general economy.
Sure.
And recall how the Nobel Prize winning economist, Joe Stiglitz, praised the economic polices of Hugo Chavez of Venezuela. Wonder what econ models he used in support of his praise of Chavez.
Astrologers can at least tell you where the planets and stars will be in the future; economists predictive skills are so bad they can “predict” a recession only after a recession has been extant for 3 months !!
The hallmark of any science is the ability to predict. Economists fall flat on their face in this endeavor , yet they award themselves Nobel Prizes in economic “science.”
What a joke !!!
Energy is the necessary precondition for both that goes unacknowledged in this position. Musk isn’t wrong, but he leaves out that we need a helluva lot more energy than we’re currently generating to usefully deploy either solution. IMHO, fusion — not AI or infinitely replicating robots — should be Musk’s moonshot.
Maybe they already have the energy? And they don’t want us to know because of their human control grid would go down if we knew they did.
Kind of hard to charge us for all that money for power that you get out of thin-air.
It would collapse the financial system if we knew they had that amount of energy.
Or maybe AI and robots is just another lie to keep the financial system going for as long as they can?
EXTREMELY unlikely. I studied alternate energy sources in college and probably still have the textbook. This is an incredibly well studied field.
Now, there are plausible energy sources for AI other than the grid. But “they” are NOT hiding it from “us.” Musk has already proposed this. Put the AI in orbit with tons of solar panels. All the bad weather and much of the night/day problem can be eliminated. Cooling will be a challenge but should be solvable.
If we build most of the future data centers in orbit and migrate those functions which do not require low latency to orbit, then our existing power sources and grid capacity on earth will be extended.
…. and the rate at which data centers toss old chipsets and upgrade with new ones? Orbital upgrades seem challenging. That, and all those orbital datacenters would eventually mean a colossal amount of space junk clogging up an orbit…
I’m against this unless each new satellite comes with rockets that will plunge it into the atmosphere on command or after 10 years. Term limits for satellites.