Why we can’t rely on AI to fix our ballooning national debt
Trump’s war of choice in Iran is costing Americans billions of dollars by increasing long-term interest rates
6 things to know about vocational education despite the Trump administration’s potential cuts
AI won’t fix our growing national debt problem
Productivity gains from the adoption of artificial intelligence (AI) have the potential to transform the U.S. economy, but a new analysis from the Center for American Progress’ Bobby Kogan and Jared Bernstein argues that AI will have little impact on the long-term trajectory of America’s growing national debt.
Kogan and Bernstein argue that high primary deficits—driven by tax cuts—coupled with growing interest rates have significantly worsened the nation’s fiscal health. The country’s ever-rising debt ratio could raise borrowing costs, reduce wage growth, worsen housing affordability, and leave average worker wages roughly $4,200 lower than they otherwise would have been by 2055.
Some have argued that an AI-driven productivity boom could grow the economy fast enough to stabilize the debt ratio on its own. But that optimism rests on a shaky foundation. For AI to move the needle on debt sustainability, it would need to permanently raise the rate of productivity growth, not just deliver a one-time boost. History offers a cautionary tale: Internet adoption lifted productivity temporarily in the 1990s before growth returned to its prior trend. The authors warn policymakers that it would be a risky mistake to assume future technological advances will eliminate the need for fiscal action.
The responsible path forward requires Congress to find ways to reduce primary deficits—prioritizing revenue from those at the top rather than cuts to programs on which working families depend.
President Donald Trump’s reckless war in Iran will cost American households, businesses, and the government billions of dollars in higher interest rate payments, even with the interim agreement with Iran in place. Last month, U.S. Treasury bond rates reached their highest level since July 2007:
📈 The 30-year Treasury bond rate increased from 4.64 percent on February 27, the day before the Trump administration started its war in Iran, to an average of 5.03 percent in May.
The rates stayed above 5 percent for two weeks, the longest period since summer 2007.
📈 The 10-year Treasury bond rate—which serves as a benchmark for mortgage rates—increased from 3.97 percent on February 27 to an average of 4.48 percent in May.
Amid rising inflation and fears that inflation will stay elevated, the Federal Reserve is holding off on lowering interest rates—and investors are demanding higher interest rates to compensate for that higher inflation. The interim agreement with Iran, a memorandum of understanding (MOU), does not change this calculus. As long as tensions remain high and uncertainty reigns, interest rates will likely stay high, and households, businesses, and the federal government will pay more for their debt.
The Trump administration’s war means everyone is paying more, not just for gas and diesel but also for their debt.
Vocational education, now more commonly known as career and technical education (CTE), has recently been on the rise as students and workers navigate a changing economy. Since only 39 percent of Americans above age 25 have a bachelor’s degree or higher, the majority of the country is left navigating career options without the clear road map that a four-year college education provides. Vocational education can help train and connect these students to careers that do not necessarily require a college degree.
Here are six things to know about vocational education:
Vocational education has been on the rise amid growing interest.
Vocational education leads to better jobs and higher earnings.
Vocational education has proven success globally.
Vocational education can help prepare young people for high-earning and good jobs in the age of AI.
Vocational education has seen proposed cuts since President Trump assumed office.
Policymakers can support vocational education by modernizing current federal law, investing in community and technical colleges, appropriating funding to expand state and local programs, investing in the vocational education educator pipeline, and improving vocational education data infrastructure.
