Macro expert Luke Gromen says the United States is now in a fiscal corner that cannot be escaped even if the AI boom delivers a powerful productivity surge.
In a new post on X, America’s AI Czar, David Sacks, says AI-related investments are now fueling 50% of the country’s GDP growth, citing data from The Wall Street Journal.
“A reversal would risk recession. We can’t afford to go backwards.”
In response, Gromen says AI is bad news for the US economy, even if it works. According to the macro expert, the US will witness an economic downturn and face massive liquidity issues if AI fails. If AI works, Gromen says the US will still face a significant challenge in generating revenue from taxpayers.
“If AI doesn’t work, it will risk recession, blowing out fiscal deficits into insufficient foreign UST demand.
If AI works, it will undermine the U.S. fiscal position (~half of US Federal receipts come from employment), blowing out deficits into insufficient foreign UST demand.”
Data shows that the US generated $1.71 trillion in payroll taxes in 2024. The figure is expected to soar to $2.61 trillion by 2035. Meanwhile, the country ran more than $1.77 trillion in deficit for the 2025 fiscal year.
Gromen uses China’s productivity boom in the 1990s to illustrate how a successful AI boom poses the same underlying problem for federal finances. According to Gromen, China produced cheap goods that boosted corporate balance sheets but hollowed out domestic industries, lowered wage growth and squeezed tax bases.
“That’s not what happened with ‘Productivity Miracle 1.0’ known as ‘China into the WTO,’ which was just a more modest version of AI in terms of impacts… Listen to Western countries whine about China overproducing. That’s AI impact already.”
Data from the Treasury Department shows that the US federal debt now stands at more than $38.33 trillion and the country paid $970 billion in net interest during the 2025 fiscal year.
To solve the fiscal issues plaguing America, Gromen sees two paths for the US.
“Devalue debt massively immediately vs gold or cut off Boomer entitlements immediately.”
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