Finance expert predicts a major crisis in 2028 — including the 'Ghost GDP' situation

There is no doubt that artificial intelligence will go a long way in making companies more efficient when it comes to cost-cutting and production. This will lead to massive corporate profits, but it's unlikely for those profits to ever reach the American consumer. AI will lead to mass layoffs as companies look to cut costs. As a result, these corporate profits might never reach the American consumer, and without spending power, they won’t be able to pour that money into other areas of the economy.

James Van Geelen, founder of analysis firm Citrini Research, recently claimed that this will lead to a “ghost GDP” situation. What this means is that thanks to AI taking people’s jobs, national accounts will be inflated, as per a report in Fortune. However, this money will hardly ever be circulated through the economy as there simply won’t be enough people with the purchasing power to raise the country’s actual GDP.

Van Geelen’s firm, Citrini, has predicted that AI will lead to white-collar workers being laid off en masse, which in turn will lead to a massive reduction in consumer spending. He called it a “negative feedback loop with no natural brake.” The firm also predicted that as AI agents start operating around the clock, businesses built on “habitual intermediation,” like food delivery apps, will plummet to the bottom of the barrel.

Citrini predicted a scenario for 2028, which will see the national unemployment rate at 10.2% and the S&P 500 suffering a massive 38% peak-to-trough crash. It also predicted that the residential mortgage market would fall apart as borrowers with 780 FICO scores would see their incomes structurally and permanently impaired by AI taking their jobs. In the simplest of terms, AI may lead to a high GDP on paper, but that might never translate to a better standard of living.

There is some optimism from industry leaders who may never face the brunt of AI’s job displacement about how most human roles would still be safe. Tanmai Gopal of PromptQL estimated that 70% of tasks cannot be automated and require a human touch. “Our job as humans and people is that we are now context gatherers instead of just workers,” he said. “What makes us good at our job, and what gives us promotions, and what makes us more impactful is actually that ability to gather context. That’s what makes us good.”

Many people have argued that as AI gets more advanced, there will be new jobs for everyone. Unfortunately, those new jobs have not even come close to the massive layoffs people have faced in recent years. AI will change the American job market in the years to come, and all people can do about it is be prepared.

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