AI’s Deficit‑Cut Promise Slashed by Hidden Costs, Brookings Finds
Brookings and the Fed model shows a once‑in‑a‑generation AI productivity shock could shrink the U.S. deficit from 6% to 2% of GDP, but five AI‑specific side effects—higher entitlement spending, a narrower tax base, rising debt‑service costs, labor‑force shifts, and defense spend—erase more than half the savings.