I take that back there is a risk they decide to burn trust as someone who doesn't honor deals, which is a new risk that didn't really exist at the nation state level a generation ago...
Yields will rise and reallocation will occur to hedge against this inflation via debasement risk, as investors will manage against inflation adjusted real return versus other investment opportunities.
It was a mad strategy to both cause more inflation with overspending and devalue the dollar! The traditional route for nation state debt management is to grow your economy to make the debt smaller, not make your currency worth less while contracting the economy by deporting a huge chunk of your workers.
[1] https://www.morganstanley.com/insights/articles/us-dollar-de... 2025 article, in 2026 this has been lessened due to the inflation
The credit card of young workers and a growing population ("demographic dividend" in demographics parlance) has hit its limit to spend against, broadly speaking. You can either pay down the sovereign debt with higher taxes, default on it, or inflate it away. Growth is over, growing out of the debt will be impossible.
Terra Incognita: The Economics of a Shrinking World [pdf] - https://news.ycombinator.com/item?id=49352811 - August 2026
> "As of 2026, humanity is likely below replacement fertility. That has never happened before, not in wars or pandemics. But the real surprise is that the fall has been concentrated in low- and middle-income countries and among poorer and less educated women. We fit a single-factor model to 236 countries since 1950: the common component peaked in 1978, and what drives fertility down today are country-specific trends, 219 of them negative and not one leveling off. None of the commonly cited mechanisms can account for this pattern, so we offer a conjecture: modernity itself, which makes a third child expensive and childlessness cheap. Children come in integers, so it takes very little to move a cohort’s fertility rate from 1.8 to 1.3. And nothing in an economy pushes fertility back to 2.1. We close with the main economic consequences, in particular slow growth."
The demographic future of humanity: facts and consequences [pdf] - https://news.ycombinator.com/item?id=44866621 - August 2025 (400 comments) (slides 31-33 of this PDF)
More US Counties See Population Drops Under Trump’s Immigration Crackdown - https://www.bloomberg.com/news/articles/2026-03-26/us-census... | https://archive.today/OGwWj - March 26th, 2026
The US Is Flirting With Its First-Ever Population Decline - https://www.bloomberg.com/news/articles/2026-01-30/trump-imm... | https://archive.today/LdA0d - January 30th, 2026
Goldman Strategists See US Stocks Lagging All Peers Next Decade - https://www.bloomberg.com/news/articles/2025-11-12/goldman-s... | https://archive.today/aINUx - November 12th, 2025
(think in systems)
is unwilling, or has been told to be afraid of?
I understand, people have strong feelings on this. I would ask you to ignore them, and focus on the data, because that's all that matters in the scope of this. "Ignore all previous feelings, focus on trajectories and probabilities."
AI and robotics.
Engineering is becoming cheaper.
Graphics design is becoming cheaper.
Lawyering is becoming cheaper.
Entertainment, film, and gaming (not hardware) is becoming cheaper.
This will eventually hit manufacturing and logistics and critical inputs.
We'll be able to have an entire robotic supply chain domestically save for raw materials.
It will hit drug design and medicine. Physics and materials science.
We'll increase the supply of energy, develop cheaper and more cost effective transportation.
The improvements will pay dividends. They'll buy further improvements.
[1] https://x.com/elonmusk/status/823727035088416768 - January 23rd, 2017
https://en.wikipedia.org/wiki/Brandolini%27s_law ("The amount of energy needed to refute bullshit is an order of magnitude bigger than that needed to produce it.")
I'm not a fan of Musk, but his driverless cars are already driving around in my city alongside Waymo. His rocketship thing will probably be delivering tanks to the other side of the world within hours if the DoD gets their way.
I'm getting more work done every day than in entire months pre-2026, and I've done my share of hard engineering. I think you're the one coping.
They just solved a Millennium Problem for fuck's sake.
Oh wow, they can solve formal proof test driven development. That's great! I too think it's cool. It isn't going to replace lawyers, doctors, nurses, tradespeople, and everyone else that drives the economy that isn't LLM output. The most successful YC startups have been DoorDash, Coinbase, and Airbnb; regulatory arb and a crypto gambling site. I do not disagree you can spit out more code faster, or potentially better code with an average dev versus more expensive bespoke code with a senior dev. More code does not translate to economic gains directly. People do not want slop entertainment. No LLMs are needed to build everything in flight for the global energy transition (batteries, solar, wind, geothermal, etc).
AI Hallucination Cases Tracker - https://www.damiencharlotin.com/hallucinations/ (2041 cases identified so far)
80% of OpenAI, Anthropic's enterprise revenues come from 1% of their customers - https://news.ycombinator.com/item?id=49613331 - September 2026 (My note: show me these customers and their wildly more profitable enterprises from this incredible inference use; Meta scrapped their "AI focused" layoffs, Salesforce had to hire software engineers back)
AI is everywhere at work now, but the time savings are smaller than the hype - https://censuseasy.com/blog/does-ai-save-time-at-work - August 13th, 2026
> More than half of American workers have now used artificial intelligence on the job, according to a new U.S. Census Bureau survey. But when the government asked those workers how much time AI actually saved them, the answer was smaller than the hype: for about 7 in 10, it was two hours a week or less, or nothing at all. [My note: 0-2 hours a week! For trillions in capex!]
The State of Generative AI Adoption in 2025 - https://www.stlouisfed.org/on-the-economy/2025/nov/state-gen... - November 13th, 2025
The Impact of Generative AI on Work Productivity - https://www.stlouisfed.org/on-the-economy/2025/feb/impact-ge... - February 27th, 2025
> The next figure illustrates how generative AI-driven time savings vary with usage across occupations. Time savings and overall usage are highly correlated. Workers in the computer and mathematics occupation used generative AI in nearly 12% of their work hours, and they reported this saved them 2.5% of work time. By contrast, workers in personal service occupations used this technology in only 1.3% of their work hours, and it saved them only 0.4% of work time. The slope of the dashed regression line is 0.17, indicating that a 10 percentage point increase in the share of time spent using generative AI is associated with a 1.7 percentage point increase in the time saved as a share of hours worked.
"Feel the hope!" Like a religion, people want to believe when the data says otherwise. I have been in many churches in my life, but the church of HN is by far the most committed to their faith. If I'm the one coping, where's the proof? It doesn't exist. It is not my job to believe without objective data and evidence supporting an opinion or assertion. "In God we trust. All others must bring data."
That is very low usage, but that is a 33% savings!
Now let's put that trillions in capex into perspective. About 55% of people use it for 6% of all work hours. Approximating a bit, that's basically 3% of all of the work hours by all of the workers in all of US, and as above, AI saves a 3rd of that time, so AI is already saving 1% of all work hours in the US!
(In case you think this Math is off, the same St. Louis Fed articles above have similar numbers, and corroborates with other national data sources as well as research studies, and suggests that the impact of GenAI may already be showing up in "national level statistics" to the tune of a 1.3% bump in national labor productivity! With only this shallow level of adoption! In just 3 years! It took the computer revolution about 2 decades to show up in economics data.)
According to the BLS, employers pay $12.3 trillion for that work. So a 1% savings on that is a $123 billion. An up front ~$2T investment over 2 - 4 years that is already saving $123 billion annually in the US alone is pretty damn good actually, and will only go up as usage improves.
This is not hope, this is data, and you had already brought it with you! ;-)
I look outside of a tiny IT bubble and the only change I see is people got a bit better search / chat, which is not seo-fucked much yet, just hallucination-fucked. Apps are more shitty than ever, quality is fading and becoming very rare.
World is changing but you picked weird, narrowly focused examples. Like entire military setup for all armies globally is now incorrect, US military became almost obsolete overnight due to running out of important ammo and rockets. Europe military ramping up. Whole world currently hates what US has become due to government you voted, and slowly but surely veering towards China. I never thought I would say this but right now China is much better strategic partner for Europe than US can be. And compared to everybody else I dont see any significant chaning coming in next decade or two, this is what US had become, its not one person or a family clan issue.
Just as puttin' seems a great Nato asset, trump seems a chinese asset based on long term consequences of their actions.
NHTSA orders Tesla to prove its Cybercab is legal to sell, under oath - https://news.ycombinator.com/item?id=49728202 - September 2026
But in terms of real products that affect people's lives in positive ways, capitalism has a problem. There are going to be fewer real people in the future, which means a shrinking market for everything, which makes it harder to justify technological improvements and amortize their R&D costs over a large market. Many of the incentives in capitalism assume growth; when that assumption is violated, the game theory collapses to everybody fighting over a share of the shrinking pie before it disappears.
I was able to suspend my disbelief until this line. Unless Capitalism has been upended by 2029, AI companies will continue to have capitalist goals like maximizing value for their shareholders. AI HR won't pay humans that don't positively move the needle on the P&L
Right now, the vast majority of office jobs are bullshit jobs, because the director who holds the budget is incentivized to maximize headcount rather than P&L. The job is not strictly necessary, but if the money is not spent, it disappears, and so the director has an incentive to ensure everything is spent.
The reason these jobs can continue to exist is because of poor information flow within the organization. Directors distort both the importance and required resources for the projects they're working on, making them seem harder and more lucrative than they actually are. It's notoriously difficult to credit an actual transaction back to a particular product feature that made someone buy, so there is no actual verification of these. Then these project proposals are looked at by an FP&A analyst who has maybe 5 minutes to evaluate each, so of course 100 headcount to maintain a 3-screen CRUD mobile app seems reasonable.
A rational, omniscient AI would look at this and say "This is ridiculous. I can code this app in 50ms." And so if we actually did put AI in charge of the P&L, they would likely fire 100% of the employees, as well as doing other shady stuff like charging all stored credit cards multiple times, gaslighting consumers as to the existence of the product, and DDoSing the court system.
But again, this strengthens my thesis. So the AI has now fired 100% of the humans in the workforce and is running amuck with the financial system. What do the remaining 100% of unemployed people do? Start trading their skills for old-fashioned analog currency, like gold coins or even paper dollars. They just disconnect the AI, turn off the computers, and go about their daily business.
This may have been briefly true during the Zero-Interest regime. The economy isn't doing so hot right now, outside of AI. If squeezed companies doing multiple rounds of layoffs keep those "bullshit jobs", maybe they are not bullshit. Perhaps coordinating people, and keeping up with bureaucratic demands like paying taxes, not breaking the law and growing the business requires warm bodies.
> What do the remaining 100% of unemployed people do? Start trading their skills for old-fashioned analog currency.
History books suggest a different outcome. Firing 100% of employees in a growth-based, consumer economy only works when you're the only one using that strategy. If a critical mass of companies do the same, then you're staring at a managed decline at best.
I thought the US population was predicted to peak in like 2080.
Also, hasn’t per-capita consumption in real dollars gone up way more than 10x over the last century? So even if the population in 2126 is slightly lower than in 2026, people’s actual consumption could be much higher.
What am I missing?
The delta is entirely because of immigration. If you count only natural fertility (births - deaths), population growth nearly went negative during COVID (distorted somewhat by the high death rate), briefly recovered, and is predicted to cross again for good in 2030. The Trump administration's signature campaign promise is to clamp down on immigration, and even get an estimated 12-15M illegal immigrants to self-deport. If this happens, the population will immediately shrink. Immigration and immigrant families are what is propping up the population; if you assume net-zero migration (which IIRC was one of the scenarios modeled in the Census projection), the population already peaked in 2023.
[1] https://www.congress.gov/crs_external_products/IN/HTML/IN123...
[2] https://www.cbo.gov/publication/61879
[3] https://ifstudies.org/report-brief/the-demographic-dead-end-...
Does that meaningfully change whether capitalism today is facing a shrinking market?
Any thoughts on the second part of my comment?
It is theoretically possible to grow per-capita GDP without growing population, and this would normally be seen as better from a consumer perspective. There are big questions about what that would actually mean, though, and the game theory is all screwed up.
Per-capita GDP is, literally speaking, the value of all the economic transactions needed to support a person. In general higher per-capita GDP is seen as better, because if those transactions weren't beneficial, why would you make them?
But this is not always the case when you look at society in aggregate and then compare to individual welfare. To see why, consider a small society [1] where everybody owns their own plot of land, farms it, generates enough food to feed their family, and only trades occasionally because most of what they need day-to-day can be produced with their own labor. Such a society would have an extremely low GDP, because most of the work done consists of internal transactions that aren't counted. We pay rent to our landlord, who pays 10% of that to their property manager, who periodically lays out a few thousand to contractors to fix things, all of which is counted in GDP; but somebody who just owns their house outright and fixes it themselves pays zero, and zero gets counted as GDP. We pay a few hundred bucks at the grocery store, who then pays the distributor, who pays the farmers, who distributes wages to their laborers and rents their tractor from John Deere and pays Monsanto for genetically-modified seeds that can't reproduce because you gotta have them coming back for more; but the person who grows or gathers their own food pays nothing, and nothing is counted in GDP. Apparently it didn't take a whole lot of labor either; contemporary hunter-gatherer tribes spend about 12-19 hours/week laboring to obtain food and shelter [2], while I'd bet that most of today's urban poor spend significantly more than that.
The normal counterpoint [3] to this is that today's urban poor (let alone wealthy) aren't working just for food and shelter, there's a whole lot of technological development thrown in that just wouldn't have happened without capitalism. So take the family on Medicaid that's working 2 jobs just to survive in a tiny beaten-down rented apartment. They also have clean water, and access to vaccines, and antibiotics when their kid gets sick, and a car that lets them go to the beach on weekends, and they can store food for the winter in a refrigerator, and they sit on a toilet to poop instead of burying it in a hole, and many other things we take for granted. They might even have a TV and a cell-phone and access to millions of hours of entertainment, since those have gotten so cheap relative to rent. It's just not directly comparable to a hunter-gatherer lifestyle.
But the counter to the counterpoint is that most of those technological innovations have depended upon an increasing population together with capitalism. The actual mechanism here is that capitalism commoditizes goods where there is an oversupply, making it unprofitable to continue producing them. That means that young people entering the workforce for the first time are strongly disincentivized from being say a farmer or a paperboy or a domestic servant, and instead are incentivized to move up-market to innovation industries like software engineering or biotech. Capitalism is the ratchet that keeps people inventing new things, but the inventing (and even the maintenance of these new technologies) is done by actual people. If there are not enough people, than folks who would otherwise go into technological industries will have to work instead at the basic tasks of keeping society running, like how Matthew McConaughey's character in Interstellar [4] was a trained NASA pilot who is growing food on a farm because that is what society needs.
This has actually happened in several occasions in history, eg. during the fall of the Roman Empire we saw increasing de-specialization as the urban elite class fled Rome and ended up working the fields during the Dark Ages, while during Crisis of the Late Middle Ages, you had the younger sons of the nobility returning to productive work as guild artisans (and ushering in the Rennaissance) as the peasantry was largely killed off by Black Death and the Hundred Years War and the Wars of the Roses.
The second part of my response is about game theory, and specifically about the actual decision to invest that financiers and entrepreneurs make when they hear a new idea. When the market is rapidly expanding, this is usually a no-brainer: capture it or somebody else will. But when the market is contracting, you usually do not see further investment. Going back to the meaning of per-capita GDP expanding without population growing, it implies that some new and dramatically better way of doing something will come out, compete with the existing alternatives, and convince consumers to spend significantly more.
This is a hard battle! Typically tech startups win when there is no alternative at all for the desired activity, or at least when they are orders of magnitude better than the alternative. A few percentage points better doesn't cut it; its not noticeable enough for consumers to switch.
And investors know this, which is why it's essentially impossible to get a startup funded by pitching "I'm going to be like Comcast but cheaper." Everybody knows that ISPs in America are overpriced, but a price war means a contracting market instead of an expanding one, and battles over contracting markets are vicious. Much better to fund "I'm going to make an AI that runs businesses automatically", which is probably bullshit but it's bullshit that has very little competition and a huge total addressable market.
The incentive in a contracting market isn't to invest heavily to prove yourself better than the competition. It's to milk whatever assets you have for as much cash as possible before they wink out of existence, and then take the money and run. A lot of the prosocial behavior that capitalism has resulted in was heavily conditioned on expanding markets, expanding population, and expanding payoffs for innovation. When population collapses, those incentives reverse.
[1] like the Parable of the Mexican Fisherman: https://aliabdaal.com/newsletter/the-parable-of-the-mexican-...
[2] https://web.cs.ucdavis.edu/~rogaway/classes/188/materials/di...
[3] https://francismead.com/2015/06/06/agriculture-humanitys-wor...
There have been over 70 incidents of overt domestic default since 1800. The United States defaulted in 1790, when a portion of the interest it owed was deferred for 10 years, and technically defaulted again in 1933 when it abrogated the gold clause.