AI Is Making America Smarter, but Making Americans Poorer

When technology hides economic decline, prosperity becomes an illusion

The Illusion of Growth

On paper, the American economy still looks healthy. GDP is rising, the stock market is strong, and tech giants continue to post record profits. But research from Harvard economist Jason Furman reveals a darker truth. If you remove AI data center investments, U.S. GDP growth for the first half of 2025 drops to just 0.1 percent. Over the past five years, average growth was 2 percent – meaning the real economy has fallen back to levels not seen since the 2008 financial crisis. In other words, without the AI boom, America’s economy is nearly stagnant.

AI has become a false pillar of growth – a technological shell disguising structural weakness. Manufacturing, real estate, retail, and services are all flat or shrinking, while only data center construction continues to surge. AI-related investment accounts for just 4 percent of GDP yet contributes 92 percent of total growth. That is not a healthy economy; it is an imbalance pretending to be progress.

The prosperity AI brings is narrow. Silicon Valley is richer, Wall Street is busier, but ordinary Americans are not better off. Job creation has stalled. More than 1.8 million people are long-term unemployed, nearly a quarter of all jobless workers. AI makes machines more efficient but people more disposable. Tech giants build new data centers while workers lose jobs. The numbers rise, but vitality falls.

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The Curse of Energy

The AI boom has created an energy crisis. Data centers require immense power, yet America’s energy system cannot keep up. Wind and solar projects have stalled. Clean-energy subsidies were slashed. Fossil fuels are back at the center of national policy. The Trump administration doubled down on oil and gas instead of renewables, tying AI’s future to the past. The result is an inflation engine built on electricity.

AI’s demand for power is outpacing the U.S. grid’s capacity. Tech companies are now competing directly with households for electricity. For ordinary Americans, that means higher energy bills, rising inflation, and a heavier cost of living. The faster AI develops, the heavier the burden becomes – and there is no green energy strategy to offset it. If the United States had expanded renewable capacity, it could have stabilized prices and reduced inflation. But it didn’t.

Meanwhile, Germany and Denmark now get more than 40 percent of their electricity from wind, and China’s renewable capacity is already twice that of the U.S. Yet America’s new power over the past three years still comes mainly from natural gas. They talk about the future of AI while still burning nineteenth-century coal.

Short-term politics, corporate greed, and impatient capital have produced a new kind of energy inequality. AI lights up Silicon Valley while leaving ordinary households in the dark. Computing power rises; living standards fall. Tech giants consume energy; citizens absorb the inflation. This is the real price of America’s AI prosperity.

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The Fracture Between Technology and Civilization

The AI craze has convinced many that technological progress equals social progress. It doesn’t. A faster algorithm does not make a fairer society. America’s structure is still bound by four forces – religion, capital, feudal hierarchy, and race. These layers ensure that technology’s rewards flow upward, not outward. AI has not broken the class divide; it is reinforcing it.

When computing power becomes a form of capital, AI stops being innovative and turns into an instrument of control. Tech corporations now dominate data, energy, and narrative power, while ordinary people simply live under technological governance. AI is making machines smarter but citizens less free. The contradiction grows sharper: the tech elite debate the future while the working class worries about next month’s bills. The old order of religion, money, and race hasn’t disappeared – it has rebranded itself in code.

In Silicon Valley, engineers fight for access to GPUs. In the Midwest, factory veterans are forced into early retirement by automation. In the South, families turn off air conditioners to afford rising power bills. The AI era is not a revolution of inclusion but a war over resources.

As long as religion guides politics, capital controls education, and race defines neighborhoods, no number of AI models can heal America’s fractures. Technology can replace labor, but it cannot replace trust. Progress in hardware has only exposed stagnation in governance. The system evolves too slowly to absorb the shock of innovation. When institutions fail to channel the gains of technology, that technology becomes a multiplier of inequality.

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The Edge of the Bubble

The AI boom is built on debt and speculation. The question is not if it bursts but when. With every new investment, risks accumulate across electricity, land, and finance. AI companies borrow to build data centers; banks issue bonds to fund them. It is an industrial version of the subprime bubble forming in real time. If AI revenues fail to meet expectations, the collapse will be faster than the dot-com crash. Debt will explode, the grid will strain, capital will flee, and unemployment will surge.

America is being pulled into a new trap – machines are getting smarter while human lives get smaller. Technology is shining brighter while society grows darker. The prosperity of AI is temporary; the costs are permanent. It makes the numbers look better while hollowing out the soul of the nation.

Every technological revolution has been misread by capital. The steam engine built factories but also child labor. The internet created freedom but also surveillance. AI will be no exception. Technology can create the future, but only civilization decides who gets to live in it.

This AI boom is far from over. The real question is not what AI can generate, but what remains of America after the bubble bursts – and whether the country can rebuild trust and order once the illusion fades.