America needs a real AI economic plan — before the crisis hits

AI could create a rare chance to remake the safety net. Washington can’t waste time.

When you ask people when they knew Covid was going to be a huge deal, they give a range of answers. “When Tom Hanks got sick” is a popular one. So is “when the NBA suspended the season.” The most plugged-in people will sometimes cite early rumblings from Wuhan in December 2019/January 2020.

Americans don’t know how to fight AI. So they’re fighting data centers.

AI is scaling faster than any past tech boom, and it’s likely to produce an economic emergency — a moment when policymakers will suddenly accept big risks and big changes. The US isn’t ready.

These crisis windows open dramatically but close fast. In 2008 and 2020, near-universal cash payments and huge bailouts won bipartisan support, then vanished within months. Assuming AI will permanently shift politics toward generous policy is wishful thinking.

Today’s proposals fall short on both ends: AI labs offer sweeping ideas — sovereign wealth funds, portable benefits — with none of the detail legislation needs, while DC figures like Gina Raimondo push undersized fixes like retraining, too small for a transition that could wipe out whole categories of work.

Whoever has a detailed, ready-to-pass plan when the moment hits gets to shape it — the way TARP came straight from a “break the glass” plan drafted months earlier.

For me, the turning point came on March 17, 2020, when Republican Sen. Tom Cotton proposed sending every American checks from the government.

To be clear, at this point, my then-employer Vox had already sent everyone to work from home indefinitely, and it was clear something dramatic was happening. But I hadn’t yet internalized that the Overton Window in American politics had shifted dramatically.

True, there were some Republican Senators who, by 2020, were expressing more openness to safety net programs, and rethinking Reagan-style laissez-faire economics. Tom Cotton, though, was not one of these senators. I didn’t think he really had strong economic policy opinions at all; he was a defense and culture war guy. He cared about defeating China and, secondarily, defeating Woke. Universal cash handouts were not his bag. And yet here was Cotton, not just calling for near-universal cash payments, but also for welfare work requirements to be suspended and for big block grants to states to expand unemployment insurance.

This turned out to be an early indication of the actual policy the US would pursue. Within a couple of weeks, with the US unemployment rate fast headed for what would be a record high of 14.7 percent in April, a Republican Senate and president had signed off on the CARES Act, which included payments of up to $1,200 per eligible adult, $2,400 for eligible married couples, and $500 per qualifying child, along with a $600 per week unemployment insurance and a massive business bailout program. The Senate vote was unanimous, and the House approved the final Senate amendment by voice vote.

If you had told me literally any of that would happen in February 2020, I would have laughed at you. But the normal rules had stopped applying. All that was solid had melted into air. Much, much bigger things were, suddenly, possible.

The AI industry just won a race — but lost the war

I’ve been thinking about that moment a lot as advanced AI models grow more and more capable, and more and more central to many businesses’ strategies. As of May, Anthropic is reporting an annualized revenue rate of $47 billion, equaling the likes of Coca-Cola and exceeding Netflix. That’s up from $30 billion a month earlier. If their revenue keeps growing at 56.7 percent a month, they will outpace Amazon, currently the highest-revenue company in the world at $717 billion a year, by late November or early December. The AI boom is already unfolding faster than the internet or mobile booms before it and may yet speed up even further.........

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