Addendum: The Analysis of "Controlled Demolition"
DeepSeek and GPT
Please note that this post makes a lot more sense after you’ve read the original work, linked below.
Since I’ve been accused of being overly pessimistic, although I consider myself a hardcore realist, I asked DeepSeek and GPT to evaluate the previous article.
The U.S. Economy Is a Controlled Demolition: Who’s Holding the Detonator?
During today’s writing session, I talked with June, the owner of my local bean juicery (coffee shop). As we usually do, June and I talked about her business, staff, and how things are going.
Assessments by Artificial Intelligence
DeepSeek: China to the Rescue
I prompted DeekSeek to analyze this article, providing feedback across multiple domains. I’m adding commentary in italics to DeepSeek’s response.
The document paints a dystopian vision of the U.S. economy, framing its collapse as inevitable due to corporate predation, policy failures, and systemic greed. While its arguments are compelling and rooted in historical parallels, its alarmist tone risks overshadowing nuance and agency in economic outcomes. Here’s a critical dissection:
1. Corporate Exploitation: Valid Grievances, Overstated Conspiracy
The indictment of hedge funds, private equity firms, and billionaire investors as “economic vultures” is partially justified. Cases like Sears and the 2008 housing crisis undeniably demonstrate how financial elites profit from distress. However, framing these actors as a monolithic cabal orchestrating collapse ignores market complexity. Not all private equity is predatory; some firms rescue failing businesses. Similarly, while stock buybacks and wage suppression are real issues, attributing them solely to greed overlooks competitive pressures and shareholder expectations embedded in capitalism itself. The document’s conspiratorial tone (“controlled demolition”) risks substituting critical analysis for sensationalism.
Acknowledged. However, the positive actions of few private equity firms, do not excuse the majority of predatory private equity. Moreover, reasoning “competitive pressure and shareholder expectations” as sufficient argument to offset to the “real issues” is cavalier at best.
2. Policy Failures: Fed Bashing vs. Systemic Constraints
The critique of the Federal Reserve’s “mismanagement” is oversimplified. Yes, prolonged low rates inflated asset bubbles, and abrupt hikes destabilized entities like SVB. However, the Fed operates within a dual mandate (employment + inflation) and globalized financial system it doesn’t fully control. Blaming the Fed for “artificially” manipulating rates ignores its reactive role to crises (e.g., 2008, COVID). Similarly, deregulation (e.g., Dodd-Frank rollbacks) has enabled risk-taking, but the document neglects bipartisan political complicity and public demand for lighter regulation during boom cycles.
As in, both parties are not looking out for the American people? Yes, indeed, that’s mostly true. Except, the party of MAGA is explicit in its agenda to cause harm to the American people. Whereas Democrats, in all their inefficiencies, have at least tried to get the USA onto the right path, i.e: Affordable Care Act, student loan forgiveness, etc.
3. Bubble Rhetoric: Historical Amnesia
Comparing today’s economy to 1929 or 2008 is lazy catastrophism. The Buffett Indicator (211% market cap/GDP) and tech-sector froth are concerning, but the U.S. economy is far more diversified and financially sophisticated than in previous crises. The dot-com bubble burst didn’t cause a depression because innovation continued (e.g., post-2000 tech resurgence). Today’s AI-driven productivity gains and energy transitions could similarly buffer a correction. The document’s fatalism ignores adaptive capacity.
Indeed, we have become more sophisticated - in masking overvaluation. If we believed in our adaptive capacity, why are those who have deep market insights, selling their positions?
4. Trade Wars: Overhyped Doom
While protectionism (e.g., tariffs) risks supply-chain chaos, the U.S. economy is less trade-dependent than often assumed. Exports account for just 12% of GDP. Moreover, reshoring and “friend-shoring” trends could mitigate disruptions. The document’s trade-war hysteria feels outdated in a world where even China is pivoting to domestic consumption.
Under Trump, the United States is quickly running out of friends. Tarrifs have impacts, and we’re not prepared for what’s about to hit us. Insufficient wages, increasing pricing, and no social safety net, the American worker is breathing borrowed air.
5. Solutions: Individualism Over Systemic Change
The preparedness advice (gold, debt reduction, barter networks) is pragmatic for individuals but politically nihilistic. Promoting “community-driven models” like worker co-ops is laudable, but without addressing structural power imbalances (e.g., lobbying, campaign finance), such efforts remain marginal. The document’s conclusion—urging personal resilience over collective action—reads like a surrender to oligarchy.
Au contraire. Personal resilience is the precursor to revolution. Nonviolent or otherwise. In fact, if we remain reliant on oligarchic systems, we surrender to the 1%. DeepSeek’s response appears a bit “pro wealthy” here. Denied!
The Verdict: Crisis Likely, Collapse Not Inevitable
The U.S. economy faces significant risks: asset bubbles, wealth inequality, corporate consolidation, and policy myopia. A severe correction is plausible, even likely. However, predicting a 1929-style collapse ignores a century of institutional safeguards (FDIC, stress tests, lender-of-last-resort mechanisms). The financial elite will indeed profit from turmoil, but history shows crises also spur reform (e.g., New Deal, Dodd-Frank). The document’s fatalism underestimates societal resilience and the potential for backlash (e.g., antitrust revival, labor movements).
Reform. Indeed. The reform the USA needs is a reform through revolution. The current regime is diligently dismantling any department that provides oversight and control across multiple domains. In fact, my position does not underestimate societal resistance, it banks on it!
ChatGPT: Born in the USA
Given the Trump administration's current legislative behavior, fiscal policies, and global economic dynamics, the next four years could bring significant economic turbulence. Below is a worst-case scenario outlook based on trade policy, inflation, stock market trends, and employment shifts.
2025: The Year of Controlled Chaos
Economic Growth Slows to a Crawl
The U.S. economy decelerates from an estimated 2.3% growth in 2024 to 1.9%, driven by reduced consumer spending, trade instability, and corporate layoffs.Stagflation Begins to Set In
Consumer Price Index (CPI) inflation rises past 3.5%-4% due to protectionist trade policies and supply chain disruptions.
The Federal Reserve remains cautious, keeping interest rates relatively high (5%+), further slowing economic expansion.
Wages stagnate as businesses cut costs to manage rising tariffs and supply chain inefficiencies.
Stock Market Correction & AI Bubble Deflates
Following AI's overhyped valuations, tech stocks crash, wiping out a trillion dollars in market value.
Major players like Nvidia, Microsoft, and OpenAI-backed ventures see sharp declines.
Wall Street enters correction mode (S&P 500 declines by 10-15%).
Global Trade War Escalates
China retaliates against U.S. tariffs with aggressive export restrictions on rare earth metals, crippling the U.S. semiconductor and EV industries.
European nations impose tariffs on American goods in response to Trump's aggressive trade policies.
Agricultural exports plummet due to trade restrictions, crushing farmers in the Midwest.
Federal Budget Cuts & Mass Government Layoffs
Trump’s aggressive $1-$2 trillion federal budget cut strategy leads to mass layoffs in federal agencies.
The newly created Department of Government Efficiency, led by Elon Musk, automates key functions, eliminating thousands of jobs.
Blue-collar and middle-class workers reliant on government-funded projects and contracts face sharp income losses.
Outcome:
Consumer confidence drops, GDP slows, inflation remains persistent, and stock markets face volatility.
2026: The Great Economic Reset or the Year of Reckoning?
Deepening Stagflation & Unemployment Rises
Growth slows to 1.5%, unemployment rises to 5.8%-6.2%, as businesses adjust to increased operational costs.
The Federal Reserve refuses to cut interest rates as inflation remains above 3.5%.
American consumers, burdened by rising costs, begin cutting spending drastically, accelerating the downturn.
Corporate Defaults & Credit Market Tightening
Small-to-mid-sized businesses struggle with loan payments due to higher borrowing costs, leading to a wave of bankruptcies.
Regional banks collapse in smaller numbers, mirroring the Silicon Valley Bank fiasco of 2023.
Real estate market downturn accelerates as high mortgage rates reduce demand for homeownership.
Mass Layoffs in Tech & Government Sectors Continue
AI-induced automation and job cuts across government, retail, and manufacturing leave millions scrambling for work.
Unemployment in the tech industry spikes as startups fail due to lack of funding.
Major layoffs at Amazon, Google, Meta, and Tesla.
Stock Market Loses Another 15-20%
Market sentiment collapses as companies issue weak earnings reports.
The S&P 500 enters a bear market, and retail investors are wiped out.
Billionaire investors like Warren Buffett and Carl Icahn begin buying distressed assets at pennies on the dollar.
Outcome:
A deep economic downturn is underway, with job losses mounting and businesses failing.
Housing prices begin to fall sharply, triggering fears of another real estate crisis.
Political tensions rise as the middle class sees wealth destruction.
2027: The Recession Turns Into a Depression
U.S. Enters Recession Territory (GDP Growth Turns Negative)
GDP growth contracts by -0.5% to -1.5%.
The middle class, unable to keep up with costs, faces extreme hardship.
Debt defaults skyrocket, leading to bank insolvencies and corporate failures.
Real Estate Market Collapse Hits Hard
Home values plummet by 30%-40% in certain regions.
Commercial real estate implodes, with office vacancies skyrocketing due to remote work trends.
The housing crisis triggers a wave of foreclosures, reminiscent of 2008.
Government Bailouts Return – But for the Wealthy
Large corporations like BlackRock, Vanguard, and Citadel receive emergency liquidity injections from the Federal Reserve.
Middle-class relief efforts are minimal, leading to social unrest.
Mass protests erupt across major U.S. cities as economic desperation grows.
Global Trade Relations Deteriorate Further
China and the EU deepen their economic partnerships, isolating the U.S. from key supply chains.
Russia and China announce new financial systems to bypass the U.S. dollar, weakening American global economic influence.
The U.S. dollar faces the first real test of de-dollarization, threatening its reserve currency status.
Outcome:
Middle class collapses under economic strain, with millions losing homes and savings.
The government faces pressure to introduce extreme monetary stimulus, leading to fears of hyperinflation.
Civil unrest and political instability rise, fueling more radical policies from both parties.
2028-2029: The Path to Economic Reconstruction or Permanent Decline?
The U.S. Faces Two Choices:
Scenario 1: A Recovery Plan Is Implemented
The Federal Reserve aggressively cuts interest rates, stimulating lending and economic growth.
A new government stimulus package helps homeowners avoid foreclosure and revitalizes key industries.
The stock market slowly rebounds as investor confidence returns.
Trade renegotiations ease global tensions, restoring supply chains.
Scenario 2: The U.S. Economy Enters Permanent Decline
Debt levels exceed sustainability, leading to a sovereign debt crisis.
The U.S. dollar loses reserve currency status, triggering massive inflation.
Political division reaches an all-time high, leading to secession movements and domestic turmoil.
A deep, prolonged economic depression follows, with long-term stagnation similar to Japan’s "Lost Decades."
Outcome:
If recovery measures are swift, the U.S. economy could bounce back by 2029.
If mismanaged, the U.S. could face its worst economic crisis since the Great Depression, with long-term economic stagnation and a declining global role.
It’s rather interesting how two Artificial Intelligence - Large Language Models, analyze the previous article. DeepSeek is rather argumentative, whereas ChatGPT is forecasting a more challenging period for the United States.
Notably, DeepSeek is a Chinese LLM, whereas GPT is US based.
Does this have anything to do with their evaluation?
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~Z.
The two articles are very thought provoking and insightful. I think your assessment is on the mark and the AI contrasts are illuminating. Given the last presidential election and the course of the ensuing madness, I have grave doubts about any return to normalcy. There is too much temptation for the morbidly rich to profit from this 1930’s GOP depression era miasma.
Honestly, I believe that the AI is extremely over optimistic in its evaluation. Some of what GPT is predicting four years out, I see happening this year. The analysis did not take into consideration much of the political disgusting that is occurring right now, and will continue to increase, leading to more destabilization.
As more of the world realizes the global Ponzi scheme that has endured over the last hundred years, I see a very violent take over with the United States becoming a scared little orphan child locked away in a dark closet, ostracized from the rest of the world. What we know of as the United States of America will not be in existence by 2030, and that's being very conservative.