If You Don't Do Macro, Macro Does You

 Happy Friday,

Last week, I referred to macro factors that could impact you. Two worth monitoring closely are the national debt and AI. If you own a business, have a mortgage, or require money to eat, ignore the noise and stay focused on the signals from these two.

National Debt: To understand the magnitude of the national debt, now > $36 trillion, comparing it to time in seconds helps:

• 1 million seconds: Roughly 11-12 days ago.
• 1 billion seconds: That’s 1993, about 32 years ago.
• 1 trillion seconds: Approximately 29,684 BC, over 31,000 years ago, predating modern civilization.
• 36 trillion seconds: Approximately 1,139,527 BC. A time when early human ancestors like Homo Erectus were roaming, and modern civilization was far from emerging.

Currently, ~ 18% of all federal revenues go to interest on the debt. That’s more than the defense budget, and money that could otherwise be spent on improving the quality of life.

Here’s the risk to watch out for: If the buyers of long-term US debt begin to lose faith in the government’s long-term ability to manage it, they’ll demand higher yields on those bonds now. That would increase the debt payments and further erode trust, which would push yields still higher. In response, the government would likely print more money, thereby accelerating inflation, further increasing the debt, and risking an inescapable debt spiral. This could leave no money for projects, devalue the dollar, and skyrocket interest rates. The US economy is driving straight for that cliff, and Congress, guided by the Tragedy of the Commons, is at the wheel.

AI: Unlike debt, AI's impact is 100% certain. Digital intelligence is already brilliant. And good as it is, it's the worst AI you'll experience in your lifetime. The transition from a cool capability to the cacophony of practical applications is just getting started.

Meanwhile, AI leaders suggest AI could achieve superintelligence in the next 1-3 years. Superintelligence is a level of artificial intelligence that surpasses human intelligence across all domains, including reasoning, problem-solving, creativity, and emotional understanding. It'll possess the ability to autonomously learn, adapt, and optimize its own performance at an exponentially faster rate than humans, potentially mastering complex tasks like scientific discovery, engineering, or governance with unparalleled efficiency. Conversing with a brilliant AI avatar on a screen is becoming indistinguishable from having a conversation with a human.

Consulting firms sell human intelligence by the hour. Employing humans is the organization's greatest cost and risk. To the extent AI enables a superior and less risky model, the competitive marketplace will force every organization to adapt. What that looks like, no one knows yet.

Note: If AI can increase overall productivity, then GDP growth could reduce the national debt.

Punchline: These two macro-factors will play out over the next decade. Navigating them smartly will be important for your organization, team, and career. Don't rely on third-party intermediaries, i.e., legacy media, TV news, NPR, newspapers, or magazines, to select and frame what you know and think. These organizations are neither incentivized nor remotely capable of upholding that responsibility for you. Eliminate these middlemen and choose long-form conversations directly with primary sources on podcasts and X. Then make up your own mind.

You can also use AI to help...

Have a great weekend!

Dave

Feedback and blowback are always welcome: dave@goodnewsfriday.com

All 100+ topics are available at @goodnewsfriday.com