The “Great Decoupling” of 1973 (as shown in the linked EPI chart) marked the first major divergence between productivity and median compensation. As we move into the AI era, we face a second, potentially terminal “decoupling” as labor’s share of income is challenged by automation.
I am developing a framework called the **Taproot Model** to address this. The goal is to close the gap through a market-driven mechanism rather than traditional welfare. However, I believe any viable 21st-century solution must operate within 6 harsh systemic constraints:
1. **The Debt Trap:** With the national debt now exceeding **$38.4 trillion**, the solution must not require a massive government spend.
2. **The China Challenge:** It must keep or accelerate the incentives for automation to compete against state-capitalist rivals.
3. **The Innovator’s Drive:** It must maintain the rewards that drive founders to build the next Alphabet or Nvidia.
4. **The Demand Drain:** It must not depress consumer demand for revolutionary AI products.
5. **The Inflation Ceiling:** It must not trigger inflation or devalue the dollar.
6. **The Identity Crisis:** It must provide economic security while restoring the sense of personal stake once provided by traditional “jobs.”
Most current proposals (UBI, wealth taxes, subsidies) only clear a few of these. **Can we find a solution that clears all six?**
I’m dropping the full architecture this Sunday, Jan 4th. (You can search “Taproot Logic Substack” on Google to find the deep dive).
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AI won’t fix it properly fiscal policy with 1950s income tax rates might but lord knows thats not gonna happen. I would also settle for a 50% top marginal rate if some sort of wealth tax on 50 plus million net worth was implemented. This disparity is the reason why social security fund is going broke tho
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**Submission Statement**
The “Great Decoupling” of 1973 (as shown in the linked EPI chart) marked the first major divergence between productivity and median compensation. As we move into the AI era, we face a second, potentially terminal “decoupling” as labor’s share of income is challenged by automation.
I am developing a framework called the **Taproot Model** to address this. The goal is to close the gap through a market-driven mechanism rather than traditional welfare. However, I believe any viable 21st-century solution must operate within 6 harsh systemic constraints:
1. **The Debt Trap:** With the national debt now exceeding **$38.4 trillion**, the solution must not require a massive government spend.
2. **The China Challenge:** It must keep or accelerate the incentives for automation to compete against state-capitalist rivals.
3. **The Innovator’s Drive:** It must maintain the rewards that drive founders to build the next Alphabet or Nvidia.
4. **The Demand Drain:** It must not depress consumer demand for revolutionary AI products.
5. **The Inflation Ceiling:** It must not trigger inflation or devalue the dollar.
6. **The Identity Crisis:** It must provide economic security while restoring the sense of personal stake once provided by traditional “jobs.”
Most current proposals (UBI, wealth taxes, subsidies) only clear a few of these. **Can we find a solution that clears all six?**
I’m dropping the full architecture this Sunday, Jan 4th. (You can search “Taproot Logic Substack” on Google to find the deep dive).
AI won’t fix it properly fiscal policy with 1950s income tax rates might but lord knows thats not gonna happen. I would also settle for a 50% top marginal rate if some sort of wealth tax on 50 plus million net worth was implemented. This disparity is the reason why social security fund is going broke tho