“The only way to get us out of the debt crisis, and prevent America from going bankrupt, is AI and robotics…. We need to grow the economy at a rate that allows us to pay off our debt” - Elon Musk on Joe Rogan Podcast at 2:30:27 https://youtu.be/O4wBUysNe2k?si=hu3MedrAih6Jza0g&t=9027

Here is a quote from Elon Musk which is both exciting and disturbing.

I am excited because I agree that AI and Robotics will create a large amount of value, help us use scarce resources more efficiently and create wealth for some.

At surface value, using AI and robotics to rapidly increase the GDP of a country like the USA or UK which has Trillions in debt and interest payments is a great idea. It seems like a once in a generation opportunity to transfer wealth from the asset holders to the value creators through free market capitalism and not a communist revolution. But what would a future look like if the majority of the value is created by robots and not people?

I am disturbed because a lack of reliance on individuals for tax revenue, because of the increase in government tax revenue companies stemming from AI and Robotics, decreases the bargaining power that individuals have against government overreach.

So far in FY 2026, individual income taxes have accounted for 54% of total revenue while Social Security and Medicare taxes made up another 32%. That is 86% of Federal Revenue.

Because the U.S. Federal Government is currently dependant on individuals for 86% of its tax revenue, it cannot outrage the general public too much. If they tried pushing policies which harmed individuals too much, some people could remove themselves from the workforce and tax revenues would fall for the government.

However if AI and Robotics create enough value, we could see the following effects:

• A reduction in demand for human labour, lower wages adjusted for inflation,
• An increased in % of gov revenue from corp taxes stemming from AI and Robotics.
• A reduction in % of gov revenue from individual income taxes.

It will be interesting to see how this note ages with time.

It feels like in the United Kingdom there is a large proportion of the population who are vocally frustrated with government. I noticed it did not change when the party in power changed from Conservative to Labour. This feels like an everlasting frustration from a continuous loss of faith in the government to deliver on promises.

Anyway, I am off to build an AI & Robotics company.

To be clear the main concern about a AI & Robotics dominated economy is that the government no longer needs to approval of the tax-paying individuals who make up the workforce, not that wages will be lower. Although I do believe that unskilled labour is unusually expensive in the UK right now and it would be unjustified for minimum wage to rise adjusted for inflation past this point for at least a decade.

Some more brutal thoughts:

• What happens when the average UK citizen is a liability not an asset? We’ve all seen the graph showing Danish non-western migrants net contributions, when your natives are also a net negative economic contribution thats scary.
• It’s not really a human vs robot argument. Robotics are inevitable. It’s ****nation vs nation in automation. Also if we take a look at NVIDIA it’s clear that the people selling shovels also get paid.
• Future electricity control and demand becomes more important than food?
• In the same way that some countries became Bitcoin safe havens, some new wave is the robot. Countries become the place to create your robots, or run your AI models.
• National Population and GDP become less important, total compute power and total energy generation become more importnant.