Academia is starting to analyze “AI layoffs,” and the result is not pretty. A recent study seems to conclude that another Great Depression is unavoidable.
From an X post summary, with a few links added for context:
Two researchers from UPenn and Boston University just published a paper called "The AI Layoff Trap".
They proved something terrifying..
Every company replacing workers with AI is also firing its own customers.. Every laid-off employee is someone who used to spend money.. When enough people lose their jobs.. Nobody can afford to buy anything.. And the companies that fired everyone go bankrupt selling products to an economy with no purchasing power..
Every CEO can see this coming.. The math is obvious.. Fire workers.. Lose customers.. Lose revenue.. Collapse..
But here's the trap..
No company can afford to stop..
If you don't automate.. Your competitor will.. They cut costs.. Undercut your prices.. Steal your market share.. And you die anyway..
So every company automates.. Knowing it's collectively suicidal.. Because the alternative is dying alone while everyone else survives..
It's a Prisoner's Dilemma.. And the researchers proved it mathematically
Deflation, Then Inflation
The financial scenario that seems to flow from the above is: Deflation first, as layoffs lead to falling consumer spending and declining corporate profits. Then, as governments bail out the victims and inflate away public and private debts, a wave of inflation forces a currency reset and involuntary wealth transfer. Very messy, and potentially coming soon. So keep stacking.
