The Abundance Paradigm: Why AI Forces a Rethinking of Money Itself
May 13, 2026
Photo by Dillon Groves
A Universal Basic Income (UBI) has long been proposed as a way to cushion the blow of jobs lost to automation. Under that model, everyone receives a modest monthly payment – enough to cover basic needs and prevent extreme poverty.
But Elon Musk has gone further. On April 16, he posted on X:
“Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI.
“AI/robotics will produce goods & services far in excess of the increase in the money
supply, so there will not be inflation.”
Rather than a subsistence stipend, Universal High Income (UHI) would be a level of income allowing ordinary people to live well in a world where machines do most of the work. Musk has also said that AI and robotics are the only things that can solve the massive U.S. debt crisis.
That sounds promising, but where will the government get the money to pay the UHI? Critics say any government that tried it would go bankrupt. There are also other concerns, which will be addressed in Part 2 of this article. Here we will look at the financial underpinnings: why UHI is even thinkable, why AI forces a reexamination of how money enters the economy, why the current system cannot scale to meet what is coming, and the implicit transition needed to meet that challenge.
Why the Current Money System Cannot Scale
The national debt of the U.S. government just topped $39 trillion. China’s is $18.7 trillion. Japan’s is $8.6 trillion. Those of the UK, France, Germany, Italy and Spain are each in the multi-trillion-dollar range. Collective global debt now stands at $353 trillion, 305% of the world’s annual economic output. So even if, hypothetically, everything produced in the world in a year were applied toward liquidating the debt, it still would not be enough to pay it all off.
In fact, the debt can never be repaid, because of the way money currently enters the system. Nearly all of the money supply today is created by banks when they make loans. Banks do not lend their existing capital. The loan itself creates the money. The bank adds the loan amount to the asset side of its balance sheet and balances that sum with the same amount on the liability side. When the borrower withdraws or transfers the funds, either the bank takes them from its reserves in “vault cash” or the Federal Reserve debits the bank’s digital reserve account at the central bank. But the lending bank typically has funds coming into its reserve account at about the same rate as they are going out, so its reserves are continually replenished. Thus a very small reserve account can support a much larger money creation engine. For decades before the Fed discontinued the reserve requirement in 2020, it hovered at around 10%.
The chief problem with this debt-based system is the interest, which the bank does not create in its original loan. For a typical long-term loan, interest can double the total tab or more. Where is the money to come from to pay this added liability? Across the system as a whole, it must either come from more borrowing or from existing funds. In the case of governments, that means issuing interest-bearing bonds or tapping taxes and other revenues. The interest on the debt compounds, meaning the government is paying interest on interest. This makes the debt increase exponentially, until it is mathematically unsustainable. Then bankruptcies occur, of banks or even whole governments. Booms turn into busts, and the cycle begins again.
Today, interest on the federal debt is the second largest budget line item after Social Security, exceeding $1 trillion. Meanwhile, workers are losing jobs to AI/robotics, shrinking the income tax base. The system is clearly unsustainable.
How to Raise Demand to Scale to the Upcoming Supply
A Universal High Income would replenish the shrinking tax base by replacing the lost wages of unemployed workers. But where will the money come from to pay the UHI? The only sustainable solution is for the government to issue it interest-free. That does not mean through the Federal Reserve, which creates money in the same way banks do: it buys federal interest-bearing securities with accounting entries. The Fed collects the interest, which it is supposed to return to the Treasury after deducting its costs. But since 2008, its costs include paying interest on the reserves of its participating banks, which consumes its profits. (See my earlier article here.)
The only interest-free, debt-free solution that will actually increase the money supply sufficiently to match the projected productivity of AI/robotics is for the money to be issued directly by the Treasury.
This is not a radical new idea. It is authorized in the U.S. Constitution, which provides in Article 1, Sec. 8, that “The Congress shall have Power To … coin Money [and] regulate the Value thereof .…” Abraham Lincoln used government-issued “Greenbacks” to avoid a crippling debt to British-backed bankers. Debt-free government-issued money was also the funding mechanism by which the American colonists succeeded in creating a thriving economy and liberating themselves from the oppressive yoke of the British Empire.
In his 1729 pamphlet “A Modest Enquiry into the Nature and Necessity of a Paper-Currency,” Benjamin Franklin argued that a lack of currency was a tax on industrious farmers and producers, and that a reliable, locally issued paper currency was the “oil” for the gears of trade. The “Nature and Necessity” of this currency was to facilitate the movement of goods between neighbors. Franklin observed that the British strategy of keeping the colonies short of cash was a method of economic suppression. By forcing the colonies to use gold and silver, which were constantly drained back to London to pay for imports, the Crown kept the colonies in a state of permanent debt and low productivity. When the money supply matched the productive capacity of the people, universal prosperity resulted without inflation.
This logic evolved into the “American System of Political Economy” championed by Henry Carey, economic advisor to Abraham Lincoln. He wrote:
“Two systems are before the world… One looks to pauperism, ignorance, depopulation, and barbarism; the other in increasing wealth, comfort, intelligence, combination of action, and civilization. … One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world.”
In the context of the 21st century, the “oil” that best lowers the friction of trade is debt-free government-issued money similar to Lincoln’s Greenbacks and colonial scrip. Rather than implementing a radical financial innovation, we would be returning to our roots.
Inflation or Deflation?
The chief objection to the colonies’ paper “scrip” was that they tended to over-print, so that “demand” (money) outstripped supply. Too much money chasing too few goods produced price inflation. But in the 21st century, we will soon have the opposite problem: too little money chasing too many goods. Machines don’t need food, clothing, shelter, transportation, medical treatment or other services. So who will buy those goods and services?
Money needs to be issued to human consumers, and not just to a few wealthy human consumers serving as debt brokers thriving on interest. To create sufficient demand for the voluminous output of AI/robotics, it needs to go to the whole national population, evenly distributed. Not only can UHI work in that sort of abundant supply without producing price inflation; it is actually essential to prevent deflation.
In a conversation on X, Musk wrote:
“In a normal economy, issuing more money simply increases the dollar price of the existing output of goods & services, meaning people do NOT get more stuff. If AI/robotics massively increase goods & services output, then you actually MUST issue dollars to people or there will be massive disinflation.”
As paraphrased on Yahoo Finance (reposted from Benzinga), Musk wrote that handing out more dollars becomes a problem only when the economy’s supply of goods and services fails to surge alongside the money supply. His claim is that AI and robotics could lift production so sharply that the bigger risk would be falling prices, not rising ones.
But aren’t falling prices a good thing? In this case, no. Prices would be falling due to a lack of demand, meaning producers can’t find customers for their products. They wind up laying off workers and eventually going bankrupt. When spread across the whole economy, the result is a deflationary spiral: prices fall, businesses lose revenue, and the economy contracts, not because production is inadequate but because purchasing power is insufficient. The result is recession or depression. In the Great Depression of the 1930s, food was rotting in the fields while people were starving, because they were out of work and had no money to spend.
Job cuts from AI are already happening. According to the same Benzinga article:
“Evidence of near-term strain is showing up in corporate announcements: employers disclosed more than 27,000 job cuts linked to AI in the first quarter of 2026, according to Challenger, Gray & Christmas. The outplacement firm said that figure was up 40% from the same period a year earlier. “
Robert Reich reports that wages are around two-thirds of the typical corporation’s total cost, and that in the first four months of 2026, big U.S. corporations cut over 128,000 jobs.
How Soon Will All This Happen?
Another Benzinga article, reposted on Yahoo Finance on March 16, detailed Musk’s projected time frame:
Speaking remotely to the Abundance Summit last week, Musk told XPRIZE founder Peter Diamandis that the global economy is on the verge of an explosion so massive it defies historical precedent.
“I’d say the economy is 10 times its current size in 10 years,” Musk said, before quickly clarifying that the growth could be even more explosive. “Greater than,” he added, framing the projected shift in economic output as a “fairly comfortable prediction.” …
“Obviously if there’s like World War III or something, that could put a kink in those plans or those expectations,” Musk warned. “But in the absence of World War III, if current trends continue, I would say the economy 10xes in 10 years.” …
“The catalyst for this vertical climb isn’t traditional manufacturing or trade, but the “hard takeoff” of artificial intelligence. Musk explained that civilization is currently moving through a period of recursive self-improvement, where AI models are increasingly being used to design and build their successors.”
Ray Kurzweil, author of The Singularity is Near, sees AI reaching Artificial General Intelligence (human-level intelligence across virtually all domains) by 2029, and full transformative abundance by 2045.
Other experts question these time projections, but a radical transformation of traditional manufacturing and trade is likely to happen sometime in the reasonably near future. The question is, will the money system transition soon enough to rescue all the laid-off workers from homelessness and famine?
The Sovereign Wealth Fund Alternative
There is another model for distributing the gains of automation, one that can be phased in gradually as the AI workforce expands. It comes from Sam Altman, CEO of OpenAI. In an ironic twist, Altman and Musk, who jointly founded OpenAI in 2015, are now locked in a high-profile legal battle over whether Altman diverted Musk’s $44 million investment to transform what was conceived as a nonprofit “for the benefit of humanity” into a highly lucrative for-profit enterprise.
That dispute aside, Altman’s alternative model for sharing AI-generated wealth is a national sovereign wealth fund seeded by the profits of AI and robotics. His proposed American Equity Fund would take public stakes in the companies and technologies driving automation, capture a portion of the resulting productivity gains, and distribute them as universal dividends. The Fund would not replace a Universal High Income but would complement it.
This approach has several advantages. It ties payments directly to real output, scales automatically with productivity, and can be introduced gradually, avoiding the shock of issuing large payments before the supply side has fully expanded. It would resemble the Alaska Permanent Fund, which distributes oil revenues to residents, except that here the resource would be the most powerful general-purpose technology since electricity.
Conclusion: A New Monetary Logic for a New Productive Era
For centuries, money has been issued as a claim against the future productivity of human labor, repaid from the income that labor generates. The logic of this debt-based system collapses when machines become the primary producers of goods and services. Then the limiting factor becomes purchasing power — the ability of human beings to access the abundance their own technologies create. That requires a monetary architecture that expands with output rather than debt, and distributes income not through wages alone but through mechanisms tied to the productive capacity of the whole system.
Universal High Income and a sovereign wealth fund are two ways of doing that. One ensures a stable floor of demand; the other ensures that the public shares in the gains of automation. Both would be grounded in real production. But for the public to have access to those gains, the money supply needs to expand in proportion to the expanding pool of goods and services. This can be done by restoring the innovation our forefathers baked into the Constitution: debt-free money issued by the government itself.
How to fund a UHI without triggering inflation or driving the government into bankruptcy is the first objection critics raise, but there are others. They argue that people would stop working or stop learning, that society would collapse into idleness or chaos, that life would lose meaning without jobs, that the government would have the power to control how people spend their money. Will a UHI ring in the promised utopia or lock us into a state-controlled digital prison? Part 2 of this article will address those concerns.
This article was first posted as an original to ScheerPost.com.
AI Populism is Coming, But Not the Way Progressives Think
The phrase “AI populism” has started doing the rounds, and as is typically the case when progressives reach for the word “populism,” they have not fully understood its true nature. The dominant framing — most clearly articulated in Jasmine Sun’s recent piece “AI populism’s warning shots” — defines AI populism as the worldview that AI is “an elite political project to be resisted.” Sun catalogues the early symptoms: data centre NIMBYism, AI witch-hunts among creatives, Molotov cocktails through the windows of CEOs. On the descriptive level she is right: there is a real, often nihilistic, anti-AI energy bubbling up among radicalised young people. This is becoming so mainstream that the New York Times picked the idea up.
But this is not what AI populism is going to be. Or rather, it is not what the politically consequential version is going to be. The lone twenty-year-old with a Discord account and a homemade firebomb is not a political movement: they are a symptom. The actual movement — the one that will reshape elections, win seats and rewrite legislation — will not be about resisting AI at all. It will be about deploying the subject of AI to win power.
What AI populism actually looks like
Populism, in any form worth the name, is not a stylistic flourish you can bolt onto an existing agenda. It is a politics that names a divide between ordinary people and an out-of-touch elite, and proposes to do something about it in plain language that actually lands with the mythical “ordinary person”: more than this, it is a particular vibe, aesthetic, and energy. Many progressives keep mistaking the top-level language of populism for the substance: they think calling themselves populist will make them popular; they think they can stealthily diffuse progressive ideology without anyone noticing. Regular folks are not dim, and they pick up on this immediately.
AI populism, properly understood, is the political deployment of AI-related anxiety in service of a programme that claims to defend ordinary working people against a transformation being imposed on them by elites. It is, in essence, an AI Just Transition platform with the volume turned up: with policies on retraining, redistribution of productivity gains, protection of livelihoods, scrutiny of who benefits and who pays. All with that particular vibe, aesthetic, and energy. The intellectual scaffolding for this politics already exists. What is missing is anyone willing to pick it up and run with it: typically, progressives find dwelling in the gutter — which is where populism typically resides — just too uncomfortable for the delicate sensibilities.
This is not hypothetical. A March 2026 NBC News poll found that 57% of registered voters believe the risks of AI outweigh its benefits, against 34% who think the opposite, and that voters do not trust either major party to handle the issue. Republican pollster Bill McInturff, who ran the survey, called AI an issue “up for grabs” by either party. Politicians can read polling: the first serious figure to walk into a town hall and say “they are getting rich automating your job, and I am going to make them pay for the transition” is going to find a very large audience waiting for them, whether they come from the “left” or the “right” (and understanding that binary does not have to hold is another key lesson to learn about contemporary populism).
Two roads, both populist
Here is where it gets interesting, and where the progressive misreading becomes dangerous. AI populism can go two ways.
The first is genuine: a politics that takes the anxiety seriously and builds an actual programme: fee-and-dividend mechanisms on AI productivity gains, sectoral transition funds, real worker voice in deployment decisions, regulation of compute and data infrastructure tied to public benefit. This version would do for the AI transition what the New Deal did for industrial capitalism. It would be uncomfortable for incumbents and deeply popular with everyone else.
The second is a scam: a politics that performs concern for ordinary people while quietly serving the interests of the same capital that is deploying the technology. This version stages the rhetoric — the rallies, the enemies-of-the-people speeches, the “I will protect your job” promises — but legislates in the opposite direction. It would convert real grievance into electoral fuel and then betray it, which is to say it would do for the AI transition what standard right-wing populism has done for almost every other issue it has touched.
Don’t expect coherence
The typical progressive objection here is that right-wing populists cannot run on AI populism because the same billionaires bankrolling those movements are also the ones building the AI. This is precisely the kind of logical neatness that has caused progressives to misread the politics of the last decade.
Donald Trump, funded by oligarchs and tech executives, ran and won as the champion of the forgotten worker. Nigel Farage, a privately educated former commodities broker bankrolled by elite money, has spent his entire career as the alleged voice of the British pub. The contradiction does not matter: it does not need to make logical sense; it simply needs to resonate emotionally. Right-wing populism has demonstrated repeatedly that voters who feel unseen will accept enormous incoherence from a politician who appears to recognise them.
Expect, then, political figures who rail against “Big Tech” while taking its money, who promise protection to displaced workers while voting through tax cuts for the firms displacing them, and who deflect the real question — who shapes this transition, and in whose interests — onto a culprit that costs their backers nothing.
The cost of ceding ground
Right-wingers have made a habit of co-opting issues that progressives left lying around. Patriotism, family, community, working-class identity: each was once available to the left and has been steadily annexed because no one else was prepared to speak about it in language ordinary people recognised.
AI is sitting in exactly the same position. The technocratic centre is talking about productivity gains and responsible deployment. The activist left is focused on existential risk or on resisting AI altogether. Neither offers a populist political programme that meets people where their actual anxiety lives: in the question of whether their work, their wages and their kids’ futures will survive the next five years.
If credible actors do not enter this space soon, they will hand it to people who will use it badly. AI populism is coming. The only open question is whether it will be a politics that actually defends the people whose name it invokes, or another performance in which working people are once again the audience rather than the beneficiaries.
The window to decide is closing fast.
Joseph Gelfer is a London-based strategist working across AI, climate and the economy. He is an organising member of Our Fair Future, which focuses on the economic wellbeing of ordinary people with clean air and energy, and better health for all. His previous books include “Masculinities in a Global Era” and “Numen, Old Men: Contemporary Masculine Spiritualities and the Problem of Patriarchy”. He has written for numerous publications such as ZNetwork.org, The Guardian, The Conversation and Vice.
