Universal Subsistence Support

To mitigate the economic devastation of massive labor displacement, society will need to implement policies like Universal Basic Income (UBI) to provide economic security.

Photo of unemployed people lined up outside a soup kitchen in Chicago, USA, during the Great Depression (1929-1939). Wikipedia: Great Depression retrieved 2024-09-16.

Unlike the relative order depicted in the photograph, large scale human labor displacement is likely to lead to widespread social unrest, and violent breakdown of social structures. Humans displaced by AIdroids are not likely to peacefully stand in line for soup or doughnuts.

The table below estimates the current costs of the following US Federal government welfare programs: Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps); Temporary Assistance for Needy Families (TANF); Supplemental Security Income (SSI); Earned Income Tax Credit (EITC); Farm Subsidies (e.g., crop insurance, conservation programs,and commodity programs): and Housing Assistance.

As of April 2024, the annual costs of US Federal assistance for an estimated 85-105 million beneficiaries were approximately $261-$293 billion dollars. The estimated number of beneficiaries represents about 24-30% of the U.S. population, which aligns with general estimates of the proportion of Americans receiving some form of government assistance. The annual costs per direct recipient for those programs was an estimated $3,100-$3,500.

To speculate potential US Federal assistance costs associated with AGI level AIdroids human labor displacement, it is assumed that: 15-25 years in the future, the total US population, would be around 340 million (projecting slight growth from current levels); 75% of the population would be of working age, that's roughly 255 million potential workers; and at best a 5% employment rate would remain, i.e., only about 12.75 million would be employed.

A current subsistence-level support for a family of four (two adults, two children) is estimated at about $40,000, By comparison Social Security benefits to the 72 million recipients averaged $1,900 per month in 2023 ($22,800 for the year). Thus, a proposed Universal Subsistence Support (USS) would likely replace SNAP, TANF, SSI, EITC, and possibly parts of housing assistance; apply to 75% of the population (95% of working age plus older adults).

The following table provides a perspective of the subsistence funding requirements to attenuate the economic impact of AGI AIdroids human labor displacement:

In broad strokes the costs of Federal assistance would increase from the current $0.3 trillion dollars to a Universal Subsistence Support of $7.4 trillion dollars and would cover nearly everyone in the US. Such a scenario would deny the government income tax revenues from individuals ($2.2 trillion 2023), payroll taxes ($1.6 trillion 2023) and fundamentally overwhelm the federal budget.

Universal Subsistence Support would be the largest expense by far, essentially replacing most current welfare programs. Healthcare costs assume a universal system, likely necessary in a world with minimal employment. Other costs would include the costs associated with maintaining the population engaged and adaptable, and infrastructure and public services would still need funding, possibly at higher levels to maintain social stability.

While it is possible that AGI and AIdroids generated productivity increases may materially diminish the estimated subsistence and healthcare costs, this scenario would nonetheless require a complete reimagining of the economy, taxation, and the role of government. Implementing, managing, and funding such a system would be a massive challenge, likely requiring: heavy taxation on automated production and AI-generated wealth; possibly a form of public ownership of major AI and AIdroids systems; a rethinking of concepts like GDP, productivity, and economic growth; and redefining money itself in an AGI-dominated economy.

In this scenario, it's likely that policies shifting away from incentivizing population growth would include: capping child UBI benefits at two children per family; providing free contraception and family planning services; and promoting adoption over biological children. This shift would represent a significant change in social policy and would likely be controversial. It would need to be implemented carefully to avoid discrimination or unintended consequences. Population implosion would dramatically reduce the estimated subsistence and healthcare costs of what human population would remain.

Currently, manufacturers and services providers primarily fund the government either directly through corporate taxes or indirectly through the payment of wages to individuals from which payroll taxes are withdrawn. In an AGI-dominated economy, owners of AI systems would likely be the primary producers of goods and services, using AI and AIdroids instead of human labor. They would still need consumers to purchase their products, maintaining the demand side of the economy. Instead of taxing human labor, the government would presumably primarily tax AI-generated production and wealth, and possibly AIdroid "labor."

The USS, which replaces most traditional welfare programs, would essentially be funded by taxing the productivity of AI/ AIdroids. This creates a cycle where corporate productivity funds consumer spending, which in turn supports AI/ AIdroids revenue. However, it is not self-evident that an AGI-dominated economy will direct the manufacturing of products and the delivery of services to meet human preferential demand.

Governments influenced by special interest may not effectively perform the crucial role of regulating AI development and deployment to ensure it benefits society as a whole. In this scenario, the line between government and AI/ AIdroids interests could become increasingly blurred. One might hope that the government might function more as a distributor of AI-generated wealth and a regulator of AI systems, while AI/ AIdroids interests become more explicitly responsible for societal welfare. This reimagining of the economic system raises profound questions about the nature and purpose of AI/ AIdroids interests and the role of government in society. It would require a fundamental shift in economics, ownership, and the social contract.