The billions of investment dollars pouring into American AI are by far the largest peacetime capital mobilization in America\u2019s history or the 4th industrial revolution. Although the payoff isn’t guaranteed the setup is real and all of the pieces are in place for this boom.<\/em><\/p>\n\n\n\n Every great economic leap in American history began not with prosperity but with construction and somebody betting fortunes on infrastructure that didn’t yet pay for itself. The transcontinental rails lines came before commerce and the boomtowns. The power lines came before the electrified century they made possible. That made possible the 3 revolution of Digital Technology and the Internet. In each case the skeptics looked at the enormous bills being created and wer, right up until the payoff arrived and reordered the world. Yes, America we are entering a brave new world so stop your complaining and join in the success we are all about to achieve that is if our leaders don\u2019t screw it up.<\/p>\n\n\n\n We are living through exactly such a moment as we experienced before the industrial revolution and the numbers are staggering enough that even a natural skeptic should sit up and take notice. Major investment companies are projecting that America’s largest technology firms Amazon, Alphabet, Meta, Microsoft, and Oracle will spend roughly $805 billion<\/strong> on artificial-intelligence infrastructure this year alone, and about $1.1 trillion<\/strong> next year. To put that in perspective: private industry is voluntarily committing, in a single year, capital on the order of the cost of a major war effort and doing it with its own money, not yours. That is not the behavior of a passing fad but the signature of a general-purpose technology boom being born. Are there concerns that need to be addressed? Of course, there are just like every other economic surge forward that has taken place. To be sure the naysayers will be screaming to the heavens about the potential dangers that could be heading our way.<\/p>\n\n\n\n The value of AI is already showing up in the national accounts. The White House’s own analysis, drawing on significant Morgan Stanley data, holds that the AI investment is now adding around 2.5 percent to our GDP growth this year, and more than 3 percent next year<\/strong> with one estimate crediting the AI build-out for roughly three-quarters of first-quarter growth. You don\u2019t have to trust the administration’s spin to see this trend; the Federal Reserve’s July analysis independently found that software and computer equipment have become the largest positive contributors to recent growth. When both the boosters and the central bank are looking at the same upward line, something real is happening and in fact it is happening right here in Idaho.<\/p>\n\n\n\n Here is why the optimists believe this could rival or even exceed, the Industrial Revolution where Steam and electricity multiplied the output of human muscle. Artificial intelligence multiplies the output of the human mind and the mind is where most of a modern economy’s value now lives. If this technology delivers even a portion of the per-worker gains its early users report, and if it spreads the way electricity eventually did, the compounding effect on national wealth over a generation is difficult to overstate. Better still, it is dragging other booms along with it. We will see a once-in-a-lifetime energy build-out, a revival of domestic chip manufacturing, and a broader reindustrialization of the American heartland. These are reinforcing cycles, and to be sure America with its deep capital markets, its entrepreneurial culture, and a policy climate finally tilted toward building is positioned to lead the world.<\/p>\n\n\n\n Now for the part this honest writer owes you, because leaving it out would insult your intelligence. We are unmistakably in the investment<\/em> phase of this boom, not yet the payoff<\/em> phase<\/strong>. That same Federal Reserve study is candid that the productivity gains, so far, are \u201cnot adding up in aggregate\u201d: they remain concentrated in a few industries, adoption across the wider economy is still shallow, and a good deal of the hardware is imported, which trims the net gain to American output. In plain English, the rails are being laid at breathtaking speed, but the boomtowns they’re meant to feed are being designed but have not yet been built.<\/p>\n\n\n\n This is precisely where nerve matters and where conservatives should be the clearest-eyed people in the room. Every prior general-purpose technology showed this same lag between the spending and the reward; the canals and the railroads looked like reckless overbuilding too, until suddenly they didn’t. The mistake is not optimism. The mistake would be either of two failures of nerve: the pessimist’s, who mistakes the necessary construction phase for a bubble and talks us into standing still while other nations build; or the huckster’s, who pretends the payoff has already arrived and papers over the hard work of adoption still ahead. The naysayers are abundant as we have seen the democrats calling for strict regulations governing AI and the creators are cheering them on hoping to eliminate any potential liability from a runaway AI system that causes serious dangers.<\/p>\n\n\n\n Many of you may remember the early internet years when there was significant nervousness among government officials regarding the advent of the internet and computers as they sought to control this new system of communication and information. The internet\u2019s rapid growth raised concerns about privacy, security and the potential for misuse, prompting efforts to regulate and monitor on line activities. Lets not forget the governments use of the internet with social media to influence the use of the Covid 19 vaccine. Should we have some guardrails in place? The logical answer is yes but not to the detriment of slowing down innovation in AI\u2019s use that would allow rival countries to gain a significant advantage in AI development. Guard rails Yes: serious government intrusion and management that hinders innovation No.<\/p>\n\n\n\n The right posture is the builder’s confidence tempered by the steward’s honesty. The indicators consistent with a historic, once-in-a-century boom are not speculation they are being measured in real dollars right now, and they are enormous. Whether that boom ultimately eclipses the previous Industrial Revolutions depends on the one thing the data has not yet confirmed: that these gains will broaden out from a handful of firms into the wages and output of ordinary Americans. That is the work in front of us. The foundation is already poured. The question is whether we have the will to build the country that’s meant to stand on it. If we are to continue to be the leader of the Free World we must continue to move forward with new innovations as this is what our country was founded on.<\/p>\n\n\n\n \u201cWe Get the Government We deserve.\u201d<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" AI will be the Savior of America’s economy, not the Destroyer The billions of investment dollars pouring into American AI are by far the largest peacetime capital mobilization in America\u2019s history or the 4th industrial revolution. 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