The AI Layoff Trap | Economic Destruction By Design

True Anarchy | t.me/true_anarchy

Two economists just published a mathematical proof that AI will destroy the economy. Not might. Not could. Will — if nothing changes. [Those pushing this agenda know this will be the outcome. It is part of the controlled economic destruction plan.]

The paper is called "The AI Layoff Trap." Published March 2, 2026. [Below] Wharton School, University of Pennsylvania. Boston University. Peer reviewed. Mathematically modeled.

"At the limit, firms automate their way to boundless productivity and zero demand."

This paper develops a simple model with a simple but stark insight. Even as AI-driven layoffs sweep across industries, and even as every firm recognizes that vanishing paychecks mean vanishing customers, not one of them will stop. Each firm reaps the full savings of replacing its own workers yet bears only a sliver of the demand it destroys; the rest lands on rivals. No firm can afford to be the one that holds back. This is the trap: an automation arms race that only intensifies as AI improves, that leaves workers and firm owners alike worse off, and that no market force can break. ~ The AI Layoff Trap | Brett Hemenway Falk, Gerry Tsoukalas | Page 30

Abstract | f AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that knowing this is not enough for firms to stop it. In a competitive task-based model, demand externalities trap rational firms in an automation arms race, displacing workers well beyond what is collectively optimal. The resulting loss harms both workers and firm owners. More competition and “better” AI amplify the excess; wage adjustments and free entry cannot eliminate it. Neither can capital income taxes, worker equity participation, universal basic income, upskilling, or Coasian bargaining. Only a Pigouvian automation tax can. The results suggest that policy should address not only the aftermath of AI labor displacement but also the competitive incentives that drive it. ~ The AI Layoff Trap | Brett Hemenway Falk, Gerry Tsoukalas

...displaced workers are also consumers, and when their lost income is not replaced, each round of layoffs erodes the purchasing power all firms depend on. ~ The AI Layoff Trap | Brett Hemenway Falk, Gerry Tsoukalas Page 1 [Note this is not true in all businesses, for example: the Arms/Military/Defense/War Industry. Demand is artificial as wars are contrived, and purchases are done by governments not individuals.]

Source: https://www.researchgate.net/publication/402969772_The_AI_Layoff_Trap

Image: Source [Edited]

Original Article: https://t.me/true_anarchy/20575

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