Gary Marcus

“a bursting AI bubble would be a much bigger shock to the economy than the bursting IT bubble at the end of the 1990s that brought us to the edge of a liquidity trap. Yet the Fed has much less room to cut rates now than it did then: the current Fed funds rate is only 4 percent. So if huge AI spending is a bubble, and that bubble bursts, I can’t see how the U.S. can avoid plunging into a liquidity trap — a situation in which the Fed simply lacks the tools to get us out of a slump. If this should happen, the economy is likely to remain depressed for years.” -@paulkrugman