Ellen Brown
JULY 16, 2026

Discussions of artificial intelligence typically begin with the question, What happens when the machines take our jobs? For thousands of years, work has been the means by which we fed our families, earned our place in society, and gave structure to our lives. We have come to equate paid employment with identity.

That presumption may soon be obsolete.

When Elon Musk proposed replacing Universal Basic Income with what he calls a Universal High Income—a level of income sufficient for everyone to live comfortably while intelligent machines produce much of the goods and services society requires—critics warned that people would become lazy. They would stop pursuing college degrees, stop starting businesses, stop inventing, stop contributing. Without jobs, it was argued, life itself would lose meaning and purpose.

Interestingly, humanity’s oldest written history begins with the premise that the purpose of humans is to work. The earliest known writing was impressed into clay tablets in ancient Sumer more than five thousand years ago. The Sumerian Atrahasis tablets tell of sky-deities called Annunaki, cast in modern “ancient architect” scenarios as extraterrestrial engineers. The heavy labor required to maintain life on earth was delegated to junior gods called Igigi, who finally grew weary of the arduous work, laid down their tools and rebelled.

The remedy was to create a new being to carry their burden. This was done by genetic manipulation to upgrade the highest life form found here, creating the human species. Whether we read that as history, allegory, or mythology, its underlying message is that humanity was conceived as a labor force – and human civilization begins with a control system to manage the laborers.

The first writing was not poetry or philosophy. It was accounting: grain tallies, labor quotas, rations, obligations. Most of the original cuneiform tablets were administrative records. What began as an exchange system evolved into a money system to control work and the workers performing it. For nearly six thousand years, human worth has been measured by our productivity. We deserve food and shelter because we worked for it.

In many respects, life is still organized around compulsory labor. Writing was devised to organize it. Accounting on clay tablets predated the use of coins, managed by temple priests as intermediaries for the gods. The temple evolved into private banks, with bankers intermediating commerce.

In the 1930s, British economist and philosopher John Maynard Keynes predicted that by the end of the twentieth century, technological advancement would reduce the work-week to just fifteen hours. So why is the forty-hour work week still the norm? It has been argued that our current economic structure uses “busyness” as a form of social containment. By tethering survival to forty hours of corporate or administrative labor, the system ensures that the majority of human creative power is spent serving institutional interests rather than personal or community liberation.

That may be why modern life feels increasingly saturated with what anthropologist David Graeber termed Bullshit Jobs in a book of that name—pointless administrative tasks that serve little social purpose, but that keep people too exhausted to pursue their own interests. He argued that the rise of “fake” work is a political device to keep people from having the free time to organize or rebel. But if artificial intelligence takes over the majority of production, that changes the meaning of work.

From Scarcity to Abundance.

For centuries, scarcity shaped human behavior. Scarcity taught people to guard, to compete, to fear loss. But abundance changes the emotional landscape. What happens if we are simply handed what we need to survive? Skeptics say people will stop working and learning, that society will collapse into idleness, that life will lose meaning without jobs. But pilot studies of Universal Basic Income (UBI) programs involving unconditional cash transfers to recipients show otherwise.

UBI studies from around the world have shown positive results from UBI payments, including higher employment, lower crime, better mental health, higher graduation rates, and little evidence of a retreat from productive activity. Relieved of the constant anxiety of maintaining survival, participants typically pursue education, care for family members, search for better jobs, or start businesses they would not have dared to take on if failure meant destitution. It seems that necessity is not the only mother of invention.

Granted, the payout in most U.S. studies was a marginal $500 or $600 per month, only enough to provide a safety net for basic food and shelter. Plenty of motivation was left to add income for the finer things in life. Studies of the effects of a Universal High Income of $50,000 or more per year have not been done. But many people who are no longer working for pay, either because they are retired or because they have an inheritance or investments to live on, volunteer their time for socially beneficial causes.

Parents devote extraordinary energy to raising children without receiving a paycheck. Volunteers spend countless hours building community organizations. Amateur musicians practice difficult instruments for years with little expectation of financial reward. Scientists have pursued questions that fascinated them long before the result was likely to be commercially valuable. Thousands of programmers worked without pay to develop Linux open source software, and editors work for free to produce Wikipedia, just for reputation, community and the satisfaction of solving hard problems. These activities are not work for wages, but they are work that is quite meaningful to the people engaged in them.

The Enlightenment: Largely the Legacy of the Leisure Class.

The intellectual triumphs of the European Enlightenment—the era that birthed modern science, political liberty, and the social contract—were primarily the domain of a wealthy leisure class, or of talent that was financially backed by institutional support (church, courts, universities) or personal patronage.

Sociologist Thorstein Veblen laid out this thesis in The Theory of the Leisure Class (1899). He argued that scholarly pursuit functioned as a form of “conspicuous leisure”—a way to demonstrate financial strength by engaging in activities that were “unproductive” in the immediate economic sense. To spend decades debating the nature of sovereignty or the movement of the stars required a measure of “unearned increment” or rent extraction. Examples included:

Francis Bacon (1561–1626): As Lord Chancellor and a member of the high nobility, Bacon’s scientific methodology was fueled by the resources of the state and inherited status.

Robert Boyle (1627–1691): The father of modern chemistry was the son of the “Great Earl of Cork,” then the wealthiest man in the British Isles. His work was conducted as a “gentleman scientist” with no need for professional employment.

Antoine Lavoisier (1743–1794): Lavoisier funded the world’s most advanced chemical laboratory through his role as a “Tax Farmer” for the French crown—a position of pure financial extraction.

For those not born into the elite, intellectual survival usually required “aristocratic patronage.” John Locke’s influential work was made possible by his residency and support from the Earl of Shaftesbury, while Thomas Hobbes was a lifelong dependent of the Cavendish family. This system ensured that even “revolutionary” ideas were filtered through the lens of those who benefited most from the existing social hierarchy.

The irony is that the very thinkers who theorized about “universal human rights” and “liberty” did so from a position of security provided by the systems of land-rent and debt-extraction they were analyzing. To create truly universal “liberty” requires a secure income for all.

Non-compulsory Education.

For over a century, schools have functioned as labor factories, designed to produce compliant workers for industrial economies. If labor is no longer the center of life, education must change as well. AI already performs memorization and standardized tasks better than humans, relieving us of the need to perfect those skills ourselves. But that does not mean there is nothing left to learn. Studies of “Self-Directed Education” or “Unschooling” suggest that children are biologically wired to learn, and that removing the coercion of traditional schooling leads not to ignorance but to highly motivated, specialized learners. Self-directed education produces young adults who retain their curiosity and creativity, develop emotional intelligence, and pursue mastery for its own sake.

A 2013/2014 survey of 75 unschooled adults conducted by educational psychologists Peter Gray and Gina Riley found that 83% went on to some form of higher education. Despite not having a high school diploma, they reported little trouble getting into college, often using portfolios, interviews, or community college credits to bridge the gap. A high percentage of unschoolers pursued careers in the creative arts or became entrepreneurs. The researchers reported that unschooling helped them develop the self-reliance and out-of-the-box thinking required for these fields.

A South African study found that while “unschooled” students may have followed non-traditional paths, they often achieved high levels of professional success, particularly in creative and entrepreneurial fields. Intrinsic curiosity replaced extrinsic rewards (grades or job requirements) as the primary driver for learning.

Research on children who learn to read through unschooling shows wide variance in when they start (anywhere from age 4 to 14), but once they decide they want to read, they often reach grade-level proficiency in a matter of months rather than years because they are personally invested. Proponents argue that traditional schooling actually stifles learning by making it a chore.

The Sudbury Valley School model (founded in 1968) is a radical form of democratic education based on the belief that children are naturally curious and capable of managing their own learning. In a Sudbury school, there are no grades or required classes. Instead, students of all ages (5–18) mix freely and decide for themselves how to spend their time. Long-term studies of graduates show that they overwhelmingly transition successfully into higher education and careers, often citing the school’s emphasis on responsibility, self-direction, and democratic participation as the primary drivers of their adult success.

Self-directed learning doesn’t require an independent income, but the point is that the drive to learn and to apply that education to useful pursuits is an inherent human trait, in both children and adults. It’s something we want to do and will do, whether or not an employer requires it.

Self-actualization and Maslow’s Hierarchy of Needs.

American psychologist Abraham Maslow conceptualized the needs or goals that motivate human behavior in a clinical review in 1943. He argued that once physiological and safety needs are met, humans naturally move toward “Self-actualization” – the realization of personal potential and pursuit of creative activities. In his later years, Maslow added a level above self-actualization called “Self-transcendence”, where people focus on goals outside themselves (altruism, community and caregiving).

That natural evolution can be applied not just to individuals but to civilizations. As AI and robotics free us from the self-centered needs of survival, we can awaken to our larger purposes of collective actualization and harmonious progress.

Escaping the Welfare Trap.

That’s the promise of AI – that it can free up our time so that we can escape the meaningless “busyness” of paid labor and pursue goals more meaningful to ourselves. But the same digital tools have a darker side. Catherine Austin Fitts and other critics warn that AI could become the ultimate “digital panopticon”—a weapon of entrapment by which programmable money and algorithmic surveillance create a modern “golden cage” in which the right to receive “welfare” is tied to political compliance. The UBI thus becomes a tool of coercion.

The same technology, however, offers tools to avoid that trap. Decentralized, neutral identity systems and zero-knowledge proofs allow people to establish that they are unique humans without revealing personal data. Zero-knowledge proofs are a cryptographic method by which one party can prove to another that a statement is true without revealing any additional information. A neutral protocol is one in which the rules are transparent, fixed, and cannot discriminate against specific users. By using “Smart Contracts” on a blockchain, the distribution of UHI becomes automated. The code only checks if the user has a valid, unique identity proof. It cannot check the user’s political party, criminal record or social behavior (unless explicitly part of the code). A government-issued digital currency could also be generated using the privacy-protected, peer-to-peer models of Project Hamilton and the ECASH bill, as detailed in Part 3 of this series.

Those are political decisions, dependent on a democratic system governed by and for the people. Mandating that these tools be incorporated into any government payments system can ensure that UHI remains a right of existence rather than a reward for obedience.

If AI can handle production, it removes the original justification for compulsory labor. The choice is whether we use AI to automate our enslavement or to finally automate our exit from the Sumerian story, transforming ourselves from a managed labor force into a self-directed, creative civilization.

Rewriting the Human Story.

For six thousand years, humanity has lived inside the Sumerian story: we were created to work for external masters. But AI has brought us to the point where labor no longer must be our master. AI abundance is not the end of work but the beginning of choice, and choice is the beginning of meaning.

Our first choice must be to insist on a democratic government run in the public interest, and a financial system that supports independent endeavor. Freeing humanity from compulsory labor can then provide the freedom for us to develop more fully as human beings.

Some people will create art. Some will teach. Some will explore science, history, biology, or engineering. Some will build communities. Families may simply become more present with each other. For the first time in history, large numbers of people may have the time and stability to ask the deeper questions about the meaning of life and the unique purpose of their own lives.

In the new story that emerges, we can see ourselves not as laborers but as musicians. We can make beautiful music together, but we need the other instruments. An orchestra is beautiful because each instrument contributes its unique voice to a larger harmony. The promise of AI is to free us from compulsory labor so that we can explore our own unique gifts and discover the music only we can play.

Be sure to check Ellen Brown’s earlier posts here on the AI Abundance Paradigm.

Originally published on Scheerpost.com.

Shared via Creative Commons.

ELLEN BROWN
June 26 2026

As Americans prepare to celebrate the 250th anniversary of the Declaration of Independence, few are paying attention to a bill moving through Congress that could seriously impinge on our financial independence.

The Clarity for Payment Stablecoins Act, H.R. 4766, is slated to make privately issued stablecoins a major component of the U.S. monetary system. Supporters see stablecoins as a way to strengthen the dollar’s global role while creating a vast new market for U.S. Treasury securities. Critics see the rise of programmable private money that can be monitored, frozen, or restricted by its issuers. Banks fear the loss of the deposits that are essential to advancing affordable credit. What appears to be a debate about digital tokens has thus become a battle over the future of banking itself and finance.

Why Stablecoins Matter.

Stablecoins are privately issued digital tokens that can circulate on blockchain networks independently of the banking system. They are designed to maintain a stable value, typically one dollar per token. Unlike Bitcoin and other cryptocurrencies, whose values fluctuate wildly, stablecoins are usually backed by reserve assets such as cash and short-term U.S. Treasury securities.

Their growth has been explosive. The stablecoin market now measures in the hundreds of billions of dollars and continues to expand rapidly. Advocates see them as the next stage in the evolution of money: faster, cheaper, available around the clock, and capable of moving across borders without relying on traditional banking networks.

For users in countries suffering from inflation, currency controls, or banking instability, dollar-denominated stablecoins can function as digital dollar savings accounts. Residents of Argentina, Turkey, Nigeria, and other countries may trust a Treasury-backed dollar token more than their own national currency. In some countries suffering from inflation, merchants quote prices in dollar stablecoins and accept them directly through mobile apps.

The Push from Cryptocurrency Advocates: Ending “Regulation by Enforcement”.

The stated goal of the CLARITY Act is to establish a statutory framework that clarifies whether digital assets are securities, commodities, or payment stablecoins. Before this legislation, regulators—primarily the SEC—often applied decades-old laws to modern blockchain technology. Because the rules weren’t explicitly written for crypto, companies would discover they were in violation only when they were served with a lawsuit or a fine.

The most prominent example is SEC vs. Ripple Labs. Ripple launched its XRP token in 2012 and operated for nearly a decade without specific guidance that its token was considered a security. In 2020, the SEC sued Ripple, alleging they had been selling unregistered securities for years. Ripple was forced into years of litigation and hundreds of millions in legal fees to determine if a rule applied to them retroactively.

The CLARITY Act, alongside the GENIUS Act (which focuses on stablecoins), represents a shift from “Regulation by Enforcement” to “Regulation by Guidance,” where firms have a clear rulebook to follow before they launch products rather than waiting for a subpoena to understand their legal status.

The Government’s Interest.

he push for passage of the Clarity Act has come not only from crypto advocates but from policymakers, because every stablecoin backed by Treasury securities creates another buyer for U.S. government debt. Treasury Secretary Scott Bessent has embraced stablecoins as a means of strengthening the dollar’s global role. The Treasury Department projects that the stablecoin market could eventually reach trillions of dollars. If that happens, stablecoin issuers could become some of the largest buyers of Treasury bills in the world, helping to replace losses from those central banks that have been “de-dollarizing” by selling their reserves of U.S. debt.

Another advantage of stablecoins from the government’s perspective is their ability to reassert U.S. monetary sovereignty over the eurodollar market — the massive, offshore market where dollars are created through bank lending without direct oversight from the Fed. This is a complicated subject for a later article, but the bottom line is that by shifting global demand from uncollateralized eurodollar bank promises to tokens backed 1 to 1 by U.S. Treasuries, stablecoins effectively force privately-issued offshore dollars back onto the U.S. government’s balance sheet.

Promise or Threat? 

Those are some of the upsides, but stablecoins are not neutral payment tokens. Part 3 of this series discussed Project Hamilton, which showed what a public digital dollar could look like — fast, privacy-protected and democratic. The stablecoin system rising in its place looks very different. It is private, not public; programmable, not cash-like; surveilled, not anonymous.

Every stablecoin transaction is permanently recorded on a public blockchain. Tokens can be frozen, seized, or destroyed. Users can be blocked. Circle (USDC) maintains a blacklist function and has frozen addresses at the request of law enforcement or at its own discretion. Tether (USDT) has frozen billions of dollars’ worth of tokens across thousands of addresses. PayPal’s PYUSD includes explicit “freeze” and “wipe” functions in its smart-contract code.

This is the sort of “programmability” that CBDC critics fear – the ability to embed code into the money itself, causing it to execute transactions automatically when specific conditions are met. In fact, stablecoins could potentially be more invasive than a CBDC, since private issuers are not subject to the constitutional obligations imposed on the U.S. government by the 4^th and 5^th Amendments. In a June 23, 2026 podcast, Catherine Austin Fitts, former Assistant Secretary of Housing and Urban Development, called stablecoins “much more terrifying than CBDCs because you have complete non-accountability.” Private stablecoins operate via private contracts and “terms of service” that often bypass traditional due process. They can embed algorithmic terms that are enforced automatically, without recourse to a court or even a human teller.

A Digital Gold Mine for Issuers.

Under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), passed in July 2025, stablecoins must be backed 1 to 1 with dollar collateral. That collateral can take various forms, but stablecoin issuers typically maintain their reserves in highly liquid, short-term instruments—primarily 3-month U.S. Treasury Bills—to ensure they can satisfy redemptions quickly. As of June 18, 2026, the 3-month Treasury yield is 3.83% (down from 5%+ in 2024-25).

Stablecoin issuers make huge profits under this arrangement. The issuer sells stablecoins, uses the proceeds to buy Treasuries, and keeps the interest. Tether, the largest stablecoin issuer, has achieved a market cap of $120 billion with a staff of only about 50 employees. It reported a record-breaking net profit of $6.2 billion for the full year of 2023, and quarterly profits reaching $4.52 billion in Q1 2024 alone. A significant portion of this income is derived from its massive holdings of U.S. Treasuries, estimated at over $100 billion.

Particularly controversial are the stablecoin and crypto businesses of the president’s own family, and the potential conflicts of interestinvolved.

Who Should Receive the Interest – Private Middlemen or the Public?

Cornell Law professor Robert Hockett proposes a different model. He suggests that TreasuryDirect accounts could function as digital wallets, allowing individuals to hold Treasury-backed digital dollars directly and receive the Treasury yield themselves rather than through private intermediaries.

It is a promising idea, but it would require major changes to the existing financial architecture to preserve the credit system now managed by the banks. For more on Prof. Hockett’s proposals, see Digital Greenbacks: A Sequenced ‘Treasury Direct’ and ‘Fed Wallet’ Plan for the Democratic Digital Dollar and The Citizens’ Ledger: Digitizing Our Money, Democratizing Our Finance.

The Issue of Yield and Deposit Flight.

This is also the major concern of the banking establishment with the pending Clarity Act. A provision allowing stablecoin issuers to pay their customers “rewards,” considered the equivalent of yield or interest, could suck away their deposit base. Issuers collecting nearly 4% interest on their Treasuries could pay rewards of 2% or 3% to investors and easily outcompete banks paying 0.1 or 0.2 percent on deposits. Banking-industry estimates of potential deposit flight into stablecoin platforms range from $65 billion to over $1 trillion, with some analysts warning that in a fully developed stablecoin system, as much as $6 trillion could migrate out of the banking system.

But wait: if banks can create deposits on their books just by making loans, as the Bank of England has confirmed, why are deposits so important to them?

This is another complicated subject for a follow-up article, but the bottom line is that while a bank can create deposits, it cannot create the “reserves” necessary to transfer the loaned funds out of the bank. Deposits created when a bank makes a loan are a liability of the bank – its promise to pay on demand. What it pays with are reserves, which only the central bank can issue – either as vault cash (coins and dollar bills) or as digital reserves held in a “master account” at the Fed. The reserves are the payment rails for transferring deposits, and the cheapest way for banks to get them is through deposits transferred from other banks.

Deposits are thus considered the lifeblood of banks, and we need banks for our credit requirements. Stablecoin issuers don’t create new dollars or extend credit. They just tokenize existing dollars drawn from chartered banks, invest them in government securities, and keep the interest. Banks are the only institutions that create credit for the real economy.

If deposits leave the banking system, lending capacity shrinks; and the most vulnerable institutions are the community banks that extend credit to local businesses. Megabanks have other ways to acquire cheap reserves, including the repo market and the Fed discount window. Community banks rely heavily on incoming deposits to provide the reserves to move their loans, and they cannot compete with stablecoins in attracting deposits because they have substantially higher costs than issuers working with algorithms in the cloud.

Why We Need the Community Banks That Stablecoins Could Undermine.

Richard Werner, Prof. of Economics at the University of Winchester in the UK, argues that community banks are particularly important for economic growth. Large banks prefer large deals with large customers. A banker can spend time arranging a billion dollar transaction for a hedge fund or private equity firm, or spend the same time processing dozens of small loans to local businesses. Small and medium-sized businesses today account for the majority of jobs; and without community banks, they often struggle to get the financing to adopt new technologies and expand production.

Werner points to the German model, where small businesses typically work with local community banks, cooperative banks, and savings banks that lend only within their local areas. Because the bank and its customers share the same economic fortunes, the banks have an incentive to support local productive enterprises. When a business identifies a promising investment opportunity, it can present its plan to a local bank that already knows the company and understands the local economy. Funding decisions can sometimes be made within days, allowing firms to adopt new technologies quickly and remain globally competitive.

The result, he says, is visible in Germany’s remarkable number of “hidden champions”—small and medium-sized firms that nevertheless rank among the top companies in the world within their specialized market niches. Germany’s success, Werner argues, is closely tied to the fact that roughly 80 percent of German banks are small local institutions that lend locally.

Werner extends the same argument to China. After coming to power in 1978, Deng Xiaoping sought to improve economic performance by decentralizing credit allocation. Rather than relying on a handful of central planners to determine where financing should go, China created thousands of local banks, village banks, cooperative banks, and regional institutions. The result was a vast network of local loan officers making lending decisions based on local knowledge. Werner contrasts “five central bankers” making decisions with “five million loan officers” evaluating opportunities throughout the country. He argues that this decentralized approach played a crucial role in China’s sustained high growth and poverty reduction over the following four decades.

The same has been true in the United States, which had a record 30,456 banks in 1921. Today, however, that number has shrunk to only 9,082 insured financial institutions (banks and credit unions). Small banks have had to merge with much larger banks to stay solvent, largely due to higher regulatory costs and the competitive pressure of the megabanks.

Werner observes that bank size also affects where credit is directed. A banking sector dominated by a few large institutions tends to channel credit toward financial speculation and large corporate borrowers. A banking system composed of many small local banks tends to channel newly created money toward productive local enterprises. When credit goes into new technologies, equipment, and productive capacity, the result is to increase output, employment, and sustainable economic growth without triggering inflation.

Werner concludes that if governments want stronger productivity growth, more small-business formation, greater regional prosperity, and less inequality, they need to encourage the creation of local community banks and adopt a lighter regulatory regime for smaller institutions.

Productivity and the Burgeoning Federal Debt.

Economic growth is also particularly important for dealing with the federal debt. Stablecoins may help finance the debt, but they do not shrink it. They just fill some of the gap left by the People’s Bank of China and other central banks that have been selling U.S. Treasuries. The unsustainable $1.2 trillion interest tab must still be paid and continues on its exponential upward growth trajectory.

Treasury Secretary Scott Bessent has argued that the U.S. can “grow our way out of the debt” by increasing production and expanding the economy faster than the debt grows. President Trump has similarly argued that economic growth can reduce the relative burden of the national debt, much as occurred after World War II.

The federal debt exceeded 100% of GDP at the end of the war. But the debt burden gradually declined as the economy expanded faster than the debt, shrinking the debt-to-GDP ratio. And for that sort of growth in today’s economy, preserving the viability of community banks is essential.

Currency Backed by Debt or Productivity?

As artificial intelligence and automation replace jobs while dramatically increasing productive capacity, however, policymakers may one day question whether money must be issued against debt at all – or whether some portion of it could be issued directly against the productive capacity of the economy itself.

That is not a new idea. In fact it represents a return to our revolutionary roots. It was how the American colonists broke free of the “British system” that exploited the colonies for the production of commodities. Rather than relying on foreign currencies, the American colonial governments paid for goods and services with paper scrip they issued themselves. When the king banned that practice, the colonists rebelled – and they won.

Abraham Lincoln used the same funding mechanism to avoid usurious interest rates from British-backed banks that would have re-colonized the States by debt. He paid for the Civil War effort and major national infrastructure with government-issued Greenbacks (U.S. Notes).

When these government notes exceeded the production of goods and services, the supply and demand curve was skewed toward price inflation. But in a world of AI abundance, the curve will tilt the other way – toward too little money chasing too many goods and services. In an economy of that sort of unprecedented productivity, the government will need to issue new money just to balance the scales. And this money will need to be paid to the consumers who will buy the products, not only to close the wealth gap but to provide the demand to absorb the hyper-abundant supply.

Thus this series comes full circle, to the need for a “universal high income” or “sovereign wealth dividend” to solve an AI-induced unemployment crisis – and for a government-issued digital currency to fund it, built on the cash-like, privacy-protected model of Project Hamilton and the ECASH Act.

Be sure to check Ellen Brown’s earlier posts here on the AI Abundance Paradigm.

First published on Scheerpost.com.

Shared via Creative Commons.

Project Hamilton, ECASH, and the Quest for a Privacy-Protected Digital Dollar

 Ellen Brown
JUNE 12, 2026

The first two articles in this series explored the proposition that artificial intelligence and robotics will soon be ushering in an economy of unprecedented abundance, and examined the resource and energy constraints that could limit that voluminous growth. If machines eventually replace most of the workforce, society may need some form of Universal High Income (UHI), as Elon Musk and others have suggested, simply to keep purchasing power aligned with productive capacity. In a world where goods and services can be produced in abundance, the challenge may no longer be creating supply. It may be creating enough consumer demand (money) to purchase that potential supply.

A UHI or UBI (Universal Basic Income) would have to be issued digitally by the government. This third article addresses the fear that such a currency would come with strings attached – that it could be programmed to restrict purchases, limit movement, or enforce political conformity, imposing a “digital prison.”

The question posed here is, could a government-issued digital currency be created in a way that is privacy-protected, not programmable, and tradable like cash?

The answer is that it could. In fact, between 2020 and 2022, such a public digital-dollar system was in development. Project Hamilton, a collaborative effort of the Boston Fed and MIT, created a digital dollar that stored no personal data or transaction history, was not programmable to control how the money was spent, could be used without an intermediary, and was also the fastest payment system ever built. It was a digital money design that made a financial control grid impossible.

In late 2022, however, the program was quietly shelved – not because of a failure of design, but because it was thought to threaten the business models of banks and private payment networks. That was the belief, but a public money system built with Hamilton-style digital dollars could actually strengthen local banks, as will be shown here.

Why does all this matter? Congress is currently debating legislation that could make privately issued stablecoins a major component of the future dollar system. Supporters, including Treasury Secretary Scott Bessent, see Treasury-backed stablecoins as a way to strengthen the dollar and create new demand for U.S. government debt. Banks worry that if stablecoins are allowed to pay competitive yields, depositors could move their money out of traditional bank accounts and into digital wallets. But both sides share a common assumption: that future digital dollars must be backed by government debt. There is another possibility—a privacy-protected, non-programmable digital dollar issued directly by the Treasury and designed to function like cash.

The irony is that the privately-issued stablecoins now being implemented by Congress actually are programmable and do threaten the business model of private banks. That subject in order will be explored in a follow-up article. This article will look at the non-programmable alternative that was demonstrated and then abandoned, and at how it could be the only mathematically viable alternative for funding a UHI, if or when that option becomes necessary to maintain economic stability.

The Digital Control Grid We Already Have.

For years, the loudest warnings about a central bank digital currency (CBDC) have centered on the fear that a government-issued digital dollar would create an unprecedented surveillance system. However, a surveillance system is already built into the digital money we use today. Hamilton-style digital dollars could have bypassed that invasion of privacy.

More than 95 percent of the money supply is now digital, and the payment rails it runs on — Visa, Mastercard, PayPal, Stripe, Zelle, the major banks — already track what you buy and where you buy it. Every purchase is tagged with a merchant category code (MCC), which forms a detailed behavioral map of your life. Behind the scenes, companies like Plaid and Yodlee sit between your bank and the apps you use. When you connect a budgeting or payment app, these intermediaries often copy years of your transaction history — every pharmacy purchase, every restaurant bill, every utility payment. They store it, analyze it, and build profiles of your spending habits that can be shared or sold.

Payment processors use automated systems to flag and sometimes freeze accounts based on activities designated as suspicious by algorithms. PayPal’s Acceptable Use Policy, for example, allows it to seize funds for a wide range of activities defined by the company. These decisions are made under corporate policies buried in complicated fine print that few people actually read, policies executed by the company without due process or a clear right of appeal.

Project Hamilton, the Privacy-protected Alternative that Was Shut Down.

In contrast, under Project Hamilton a public digital-dollar system was built, tested and proved that could have blocked surveillance, protected privacy, and given Americans a cash-like digital option. Developed by the Federal Reserve Bank of Boston and MIT’s Digital Currency Initiative, Project Hamilton was a working prototype. Phase 1 delivered something no private payment network has ever offered: 1.7 million transactions per second, with settlement in under a second, no personal data stored on the ledger, no transaction history, no account numbers, and no surveillance architecture.

Instead of numbered accounts, it used opaque 32-byte hashes — a fixed-length string of 32 bytes that is cryptographically generated, random-looking, and impossible to link to a person or decode into meaningful information. It might look something like this: 0xA3F9C1E4B7D2F8C9E1A4F3B2C7D9E0F.

The system validated payments without knowing who was making them, and identity checks happened outside the transaction layer, meaning the core ledger never touched personal information. MIT released the entire codebase publicly, so that anyone could inspect it and verify that it was designed to protect users, not monitor them.

In short, the United States successfully built a digital dollar that was fast, private, and not traceable to the user.

In a 2023 report in the MIT Technology Review titled “Is the Digital Dollar Dead?”, Mike Orcutt wrote, “Hamilton’s first phase demonstrated a feasible technical approach, and the researchers promised a ‘Phase 2’ that would explore sophisticated approaches to privacy. But late last year, shortly after the project came under scrutiny from anti-CBDC legislators, the Boston Fed ended Hamilton.”

The Independent Community Bankers of America warned that a CBDC “could destabilize the existing banking system that serves as the backbone of the U.S. economy.” Members of Congress sent letters to the Boston Fed expressing concern that Hamilton’s architecture could bypass commercial banks entirely. Orcutt wrote that CBDC research suddenly became “political red meat.” Bills were introduced to ensure that a digital dollar “never sees the light of day.” And in 2022, the Boston Fed quietly ended the project.

Opponents of developing a U.S. CBDC questioned the need for it. They argued that dollars are already digital. You can pay with a debit card or credit card.

In response, Orcutt quoted Willamette University law professor Rohan Grey, who observed that  5.9 million U.S. households are “unbanked” and limited to using cash, and cash won’t work on Amazon and other online shopping outlets. He added that the non-traceability of cash is a “social good” that needs to be preserved as we transition to a digital world.

The ECASH Act: A Treasury-issued Digital Dollar.

In 2022, Grey helped author a U.S. House bill called the Electronic Currency and Secure Hardware Act (ECASH). Introduced by Rep. Stephen Lynch of Massachusetts, the legislation directs the Treasury to create and issue a digital dollar that functions like physical cash. According to the ECASH Act Fact Sheet:

“The bill mandates several e-cash features, e.g.:

• Legal Tender: E-cash must be legal tender, created and issued into circulation by Treasury, and payable to bearer.

•Financial Inclusion: E-cash must be distributed and used directly by the American public via widely available hardware devices. It must also be capable of peer-to-peer, offline transactions and interoperable with all existing financial institution and payment provider systems. Moreover, in developing e-cash, the Security must prioritize technologies that promote universal access and usability – particularly as relating to  individuals with disabilities, low-income individuals, and communities with limited access to internet or telecommunications networks.

• Privacy: E-cash must incorporate key security and functionality safeguards that are generally associated with the use of physical currency – including anonymity, privacy, and minimal generation of data from transactions. E-cash must also be distributed through secure hardware devices that are secured locally via cryptographic encryption or other similar technologies and cannot contain personal identifiable information or be subject to surveillance, transactional data collection, or censorship-enabling features.  “

Grey envisioned cards that could be tapped together or to smart phones to transfer value anonymously, online or off-line. That such an “ecash” system would work was demonstrated in the 1980s and became available through Credit Suisse in Switzerland in 1998, then through Deutsche Bank in Germany and other banks in Europe, where cash is more often used than in the United States.

The U.S. ECASH Act has not yet been passed, but it is still alive. It is a minority-party bill in a Republican-controlled House that has never passed committee, but it has been reintroduced in subsequent sessions of Congress, including the current 119^th Congress.

The Public Option – Still on the Table?

Another bill that has not yet passed – H.R. 1122, the CBDC Anti-Surveillance State Act – would prohibit the Federal Reserve from issuing a retail CBDC, ever. But even if that bill passes, there is a public option that is still available. A modern Greenback could be issued through the Treasury, the fiscal arm of the government, rather than through the central bank. This is what is mandated in the ECASH Act – Treasury-issued digital currency.

Far from a new idea, government-issued currency is actually the oldest American monetary tradition we have, dating back to the American colonists and Abraham Lincoln. During the Civil War, the United States had no Federal Reserve, no central bank and no lender of last resort. But it did have a Treasury, and the government was facing an existential crisis. To finance the war without crushing the economy with debt, the Lincoln administration issued Greenbacks: Treasury-created dollars that required no borrowing and paid no interest. They were sovereign, debt-free, interest-free, and issued directly into circulation.

Greenbacks (U.S. Notes) kept the Union solvent, stabilized prices, and funded the war effort as well as a great deal of national infrastructure. They showed that the Treasury can issue money directly when the public interest requires it.

A modern version of that option, a Treasury-issued digital dollar, is not only possible under the Constitution and pending ECASH Act; but if we are heading into an AI-driven economy where Universal High Income becomes necessary to maintain consumer demand, Treasury issuance may be the only model that makes mathematical sense. Treasury-backed stablecoins and the Fed’s Quantitative Easing are both debt-based. With stablecoins, the interest on the Treasuries flows to private issuers. With the bank reserves the Fed issues to buy Treasury debt from banks, the interest flows to the banks. With Treasury-issued dollars, government interest flows to no one, because the government owes it to no one. This is the cleanest, most democratic form of money creation, and it falls squarely within the American monetary tradition.

The age-old objection to that solution is that it would devalue the currency and inflate prices from too much money chasing too few goods. But in an age of unprecedented AI-generated abundance, that maxim would be turned on its head. When too little money is chasing too many goods, the system actually needs an infusion of new money in order to maintain economic balance.

A Public Payment System that Preserves Private Local Banking and Serves the People.

How would Treasury dollars reach consumers, and how would they connect to community banks?

One possibility is through postal banks. The United States once had a very popular postal savings system, and Japan still has one. Japan Post Bank, one of the largest deposit-taking institutions in the world, provides universal access, simple accounts, basic payments, and a public option for savings. Yet it coexists with private banks, which continue to make loans and serve as the credit engines of the economy.

A U.S. postal banking system could do the same. The Postal Banking Act is a legislative bill reintroduced in 2022, aimed at re-establishing basic financial services at the United States Postal Service (USPS). Championed by lawmakers including Senators Kirsten Gillibrand and Bernie Sanders, the act seeks to provide safe, low-cost alternatives to predatory services like payday loans and check-cashing companies. According to Sen. Gillibrand, it could also generate nearly $19 billion per year for the USPS.

For a UHI, the Treasury could issue the digital dollars, and postal banks could distribute them. Balances above a modest threshold (say $500) could be automatically swept into the customer’s chosen community bank each night. Community banks would remain the lenders, keep lending local while ensuring universal access to public money. Local banks could have access to a public liquidity window through a state-owned public bank, similar to the Bank of North Dakota model.

To prevent fraud, the banks would also continue their function of monitoring large money flows, following the “two-tier” model in which banks handle the Know Your Customer (KYC) and AML monitoring envisioned in Project Hamilton’s documentation.

Conclusion: Stablecoins or Digital Greenbacks?

A stablecoin is a privatized claim on public debt, on which the U.S. government pays interest to the issuer. A Treasury-generated Greenback would be a public claim on public productivity, backed by “the full faith and credit of the United States” – the agreement of U.S. citizens to accept those Treasury-dollars in payment.

Treasury-issued digital dollars built on Project Hamilton architecture could support a UHI or UBI in an AI-driven economy without raising taxes or increasing the federal debt, and without the exponentially growing interest that leads to boom and bust cycles in a debt-based money system. If administered through a public banking model, a digital Greenback system could preserve community banks, provide universal access to the unbanked and under-banked, protect privacy, and keep monetary sovereignty in public hands.

Project Hamilton’s design was the opposite of the surveillance-heavy systems we use today. It used opaque 32-byte tokens that carried no personal information, a ledger that stored no transaction history, and a core that never saw names or account numbers. In other words, Hamilton would have been less programmable and more privacy-preserving than either the bank-created digital dollars Americans already use or the stablecoins being legislatively negotiated now.

Part 4 of this series will look more closely at the stablecoin legislation now pending, and at how that option can serve to strengthen the dollar’s reserve currency status abroad and ease the federal debt crisis without impairing the domestic lending business of local U.S. banks.

Be sure to check Ellen Brown’s earlier posts here on the AI Abundance Paradigm.

First Published on ScheerPost.com.

Shared via Creative Commons.

Ellen Brown
May 26, 2026

Part 1 of this “Abundance Paradigm” series discussed predictions that artificial intelligence and robotics will in the relatively near future produce an economy of extraordinary abundance – one in which most labor is automated. The contention of Elon Musk is that this development will require some form of government-issued “Universal High Income” (UHI) to provide the consumer demand necessary to keep the economy functioning in a world where machines do most of the work.

Based on those projections, I argued that if a UHI were to become necessary, it could not realistically be financed through taxes or debt alone, but would require some form of debt-free sovereign money issuance — a modern version of Lincoln’s Greenbacks. The usual objection to government-issued money is that it would drive up prices and devalue the currency due to “too much money chasing too few goods.” But in this case, we would have too many goods and not enough money to provide the consumer demand to move them off the shelves. A source of abundant new money would actually be needed to keep trade flowing.

Objections came thick and fast. Some critics saw the AI revolution not as liberation but as a technocratic nightmare: AI surveillance, programmable digital money and “smart cities,” centralized control systems, and a future in which most people will own nothing while a tiny elite owns the machines, the data, and even the government. Others challenged the underlying premises: Would AI really generate such extraordinary abundance? Would productivity rise enough to justify something like a UHI? Or is this simply another round of Silicon Valley hype detached from economic reality?

Those are legitimate questions that deserve serious consideration, serious enough to require more than one sequel to address them. But whether or not we approve of Elon Musk, Sam Altman, or the AI industry itself, the AI revolution is already underway, driven by forces far larger than any individual actor. Businesses want AI because it lowers costs and increases productivity. Governments want it because they view it as strategically essential. Consumers increasingly rely on it because it saves time and improves convenience. The genie is out of the bottle.

Commentators say the AI boom is unlikely to disappear even if parts of it are overhyped. Investment firms, technology analysts, and economists increasingly describe AI not as a passing fad but as a foundational technological transition comparable to the invention of electricity or to the internet itself. Even skeptical analysts who question short-term productivity claims generally acknowledge that businesses are rapidly reorganizing around AI-assisted production.

The question now is not whether AI should exist but how we can adapt to it without falling into economic collapse or digital feudalism.

AI is Challenging the Fundamentals of the Capitalist Model.

For centuries, industrial economies have depended on a productive cycle based on work for pay. People work for wages, wages create consumer demand, and demand sustains production. But if machines increasingly perform not only factory labor but office and laboratory work — drafting contracts, diagnosing disease, designing products, writing software, driving vehicles, conducting research — then labor income will steadily decline even as productivity rises.

That creates a paradox for the capitalist model: Who buys the products if fewer and fewer people earn wages from producing them?

Historically, technological revolutions created new forms of employment even as they destroyed old ones. The automobile displaced blacksmiths but created mechanics, highway engineers, gas stations, motels, and suburbs. Computers eliminated typists but generated software industries and millions of office jobs. But AI is not confined to one sector. It is predicted to take jobs across the board.

We are not at that stage yet. But China, the world’s largest manufacturing power, is getting close, and Chinese commentators are beginning to grapple with the issue.

China as Forerunner and Test Case.

In a July 2025 opinion piece in the South China Morning Post titled “As AI Replaces Workers, China Could Consider Universal Basic Income,” Tech Editor Zhou Xin writes:

“In the past, Chinese officials have rejected proposals to distribute cash to households, even when many families were clearly in need of support. But while the term universal basic income has yet to appear in any official Chinese policy documents, it may become less foreign in the coming years because of the increasing replacement of entry-level jobs by machines.

Advances in technologies such as artificial intelligence (AI) and automation are expected to render many traditional labour roles obsolete ….

While new technologies will create new job opportunities, these roles are often unsuitable for workers displaced from traditional sectors. The pace at which old jobs are eliminated also outstrips the creation of new ones, which could lead to significant structural unemployment.”

A March 2026 article in ThinkChina raised a related issue. In “When AI Replaces Workers, Who Pays the Taxes?”, Chinese entrepreneur Simon Lin asks if AI systems and robots perform an increasing share of productive work, where will governments obtain tax revenue? Lin’s proposal is to tax the companies that profit from automation. That would help finance the government, but it doesn’t solve the distribution problem. Consumers still need purchasing power. Henry Ford understood this a century ago, when he said he needed to pay his workers enough to buy the cars they produced.

Another article in ThinkChina, titled “Socialism and Universal Basic Income: Creating Happy Societies in the Age of the Knowledge Economy,” addressed this issue in 2020. The article summary states:

“… [T]he knowledge economy offers great potential for bettering the lives of people. But capitalism may not be the best route to take. Power in the hands of a few, income gaps, job losses and wage cuts in the digital age bear this out. Can China offer a third way as it seeks to marry socialism with a market economy? The West is already considering some proposals with a socialist bent such as the Universal Basic Income (UBI). Surely, proponents of socialism can think of even more revolutionary ideas.”

The article continues:

“… China has a substantial low-income demographic. 600 million people live on about 1,000 RMB per month, which is insufficient even for housing rent alone. What we have here is inadequate demand from those with spending power, coupled with a tremendous surplus of production capacity.…”

The author observes that knowledge, once created, can be reused repeatedly at close-to-zero marginal cost, and that the AI-driven “knowledge economy” grows exponentially. That makes it possible for social productivity to grow exponentially as well, eliminating want and greatly enriching material and spiritual life. But capitalism poses some serious constraints on that promising future:

“… [A]s the knowledge economy becomes increasingly “smarter” (AI-driven), the share of wage income in the total distribution of income will continue to decline, while investment returns will be a constantly growing piece of the pie. This means the lion’s share of society’s wealth will be swallowed by capital. In the long run, only jobs with wages lower than the cost of automation have any chance of being kept.… This means that wage levels are bound to be kept low, even to the point of being inadequate for feeding oneself and one’s family.”

he article concludes: “China should kick-start preliminary research on universal basic income (UBI), as soon as possible. … What is UBI, after all, if not an attempt to rise above capitalism?”

Resource Constraints: Energy.

China may need to consider some sort of UBI, but in the United States the biggest practical hurdles to AI abundance may not be political but physical. Where will the U.S. find sufficient resources to produce the goods?

Critics point to the enormous energy consumption of AI data centers, the water demands of cooling systems, the mining requirements for batteries and semiconductors, and the environmental costs of rapid electrification. Some large data centers consume millions of gallons of water daily for cooling. Communities near rapidly expanding facilities have already reported stress on local water systems, and public pushback is growing.

Elon Musk has argued that the water problem is basically an energy problem, noting that once you have enough energy, desalination becomes cheap and simple. His proposed energy solution is solar. At a July 2017 National Association of Governors meeting, he said, “If you wanted to power the entire U.S. with solar panels, it would take a fairly small corner of Nevada or Texas or Utah; you only need about 100 miles by 100 miles of solar panels to power the entire United States. The batteries you need to store the energy, to make sure you have 24/7 power, is 1 mile by 1 mile. One square-mile. That’s it.” Not that all this equipment would need to be in one place, but that shows the projected scale.

The chief constraints to rapid and broad-scale solar development are political and regulatory. The solution being pursued now is solar collection in space, where the sun never sets, massive amounts of energy are available, cooling the equipment is not a problem, and there are no regulatory constraints.

Solar is not, however, the only possible energy solution. Advanced fission and fusion technologies are also in rapid development, largely due to AI-assisted engineering.

Small modular nuclear reactors (SMRs), once largely theoretical, are now moving into commercial development. SMRs are factory-built, standardized systems small enough in some cases to be transported by truck and assembled on site. Supporters argue that modular manufacturing could dramatically reduce both cost and construction time compared to conventional nuclear facilities.

Fusion energy, long mocked as perpetually “thirty years away,” is also advancing. Experimental reactors are already generating plasma temperatures hotter than the core of the sun, while major advances in magnetics are steadily improving stability. The main challenge is that superheated plasma behaves chaotically inside reactors, but AI systems are being used to predict these disruptions and make adjustments before they occur.

That doesn’t mean limitless energy is just around the corner. But the assumption that civilization is approaching an unavoidable energy ceiling may be outdated. In fact AI itself is becoming a key tool in creating the next generation of energy systems needed to support AI-driven productivity.

Physical Resources for Batteries, Electrical Grids and Agriculture.

AI is actually becoming a primary tool for solving resource problems in general. Modern AI-driven systems are dramatically improving electrical grid efficiency, agricultural productivity, recycling systems, and battery management. Precision agriculture reduces fertilizer and water use while significantly increasing yields. AI-managed electrical grids reduce wasted energy. Robotics improve mining precision and materials recovery. Advanced recycling systems increasingly recover rare earth minerals and lithium-ion battery materials that were once discarded as waste.

Thus while AI uses more power, the efficiency it creates in the rest of the physical economy may actually lead to a net reduction in total global resource consumption.

Solving the Water Crisis.

Singapore’s NEWater program is the gold standard for wastewater recycling, turning sewage into ultra-clean, drinkable water. It has now successfully “closed the water loop,” making the island nation resilient against external water shocks.

AI data centers are also now pivoting away from evaporative cooling to water recycling. Modern “closed-loop chilling systems” allow data centers to operate with near-zero direct water consumption once the system is filled. New major projects are marketing themselves as “water-neutral” by using closed-loop cooling technology that recirculates water rather than evaporating it in cooling towers.

Some analysts argue that the location of data centers is wrong. Unused areas are available that have abundant water supplies, existing industrial zoning, and underutilized energy infrastructure. But for communities already under stress from data centers that probably aren’t going anywhere, my own proposal would be to drill for primary (juvenile) water for residential needs. Continuously generated deep in the earth and rising through faults, primary water offers a clean, renewable, locally tappable water source independent of the surface cycle, easily accessible with robotic drilling and abundant energy. The model has been proven primarily in Africa. See my earlier article here.

Wind Power.

Meanwhile, China has successfully launched the world’s first commercial underwater data center powered directly by offshore wind. The Shanghai project was completed for less than half the cost of an equivalent 24-megawatt land-based facility, and by using seawater for cooling, it is about 30% more efficient and cuts electricity consumption by over 22%.

However, underwater data centers were not pioneered by the Chinese. Microsoft’s Project Natick, a 2018–2020 trial off the coast of Scotland, was a technically successful test that demonstrated higher reliability and lower failure rates than land servers. But Microsoft announced it was abandoning the project in mid-2024.

In the U.S., a private company like Microsoft must negotiate with local utilities and typically must pay for its own grid upgrades, which can add years and millions of dollars to a project. In China, state-owned power companies provide special energy pricing and dedicated high-voltage lines for data center clusters. There are also regulatory hurdles in the U.S. and Europe, where complying with environmental regulations is a slow and costly process.

In China, by contrast, the government designates specific areas where environmental reviews and construction permits are fast-tracked specifically for “Green AI” projects. As a result, construction is often 30% to 50% faster than for their Western counterparts. The Chinese underwater data centers are part of a massive state-led industrial policy called the “East-to-West Computing Resource Transfer,” a highly coordinated top-down strategy that treats data centers as a critical national utility integrated directly into the national energy grid. Besides providing direct subsidies and grants, the Chinese government has built offshore wind farms specifically designed to plug into data center units. Placing the AI servers directly at the base of the wind turbines eliminates the energy loss and cost of transmitting power back to the shore.

This is another real-world example demonstrating the need for public investment in infrastructure, ideally through a national infrastructure bank, to fund projects that private markets find too risky or too expensive to build alone.

The Road to Creative Freedom or to Digital Feudalism?

The potential for AI/robotic productivity is promising, but it will not automatically benefit the public. Productivity has already risen dramatically over the past century, while wealth has concentrated at the top.

The future emerging around AI contains two radically different possibilities. One is a highly centralized technocratic system in which wealth and power become highly concentrated, while citizens are managed through digital currencies, surveillance, and algorithmic governance. The other is a civilization in which automation gradually liberates human beings from monotonous labor, shortens work time, expands access to education and creativity, and allows technological abundance to serve broad human flourishing rather than narrow financial interests.

Both futures are technologically possible. Which one emerges will be determined not by the machines themselves but by the political and monetary systems governing them.

Part 3 will examine what is probably the most emotionally charged issue involved in the AI revolution: digital money, central bank digital currencies, surveillance fears, and whether an AI-driven economy inevitably leads to a programmable financial control grid.

Be sure to check Ellen Brown’s earlier posts here on the AI Abundance Paradigm.

Originally published on ScheerPost.com.

Shared via Creative Commons.

Ellen Brown ScheerPost.
MAY 10, 2026

A Universal Basic Income (UBI) has long been proposed as a way to cushion the blow of jobs lost to automation. Under that model, everyone receives a modest monthly payment – enough to cover basic needs and prevent extreme poverty.

But Elon Musk has gone further. On April 16, he posted on X:

“Universal HIGH INCOME via checks issued by the Federal government is the best way to
deal with unemployment caused by AI.

“AI/robotics will produce goods & services far in excess of the increase in the money
supply, so there will not be inflation.”

Rather than a subsistence stipend, Universal High Income (UHI) would be a level of income allowing ordinary people to live well in a world where machines do most of the work. Musk has also said that AI and robotics are the only things that can solve the massive U.S. debt crisis.

That sounds promising, but where will the government get the money to pay the UHI? Critics say any government that tried it would go bankrupt. There are also other concerns, which will be addressed in Part 2 of this article. Here we will look at the financial underpinnings: why UHI is even thinkable, why AI forces a reexamination of how money enters the economy, why the current system cannot scale to meet what is coming, and the implicit transition needed to meet that challenge.

Why the Current Money System Cannot Scale.

The national debt of the U.S. government just topped $39 trillion. China’s is $18.7 trillion. Japan’s is $8.6 trillion. Those of the UK, France, Germany, Italy and Spain are each in the multi-trillion-dollar range. Collective global debt now stands at $353 trillion, 305% of the world’s annual economic output. So even if, hypothetically, everything produced in the world in a year were applied toward liquidating the debt, it still would not be enough to pay it all off.

In fact the debt can never be repaid, because of the way money currently enters the system. Nearly all of the money supply today is created by banks when they make loans. Banks do not lend their existing capital. The loan itself creates the money. The bank adds the loan amount to the asset side of its balance sheet and balances that sum with the same amount on the liability side. When the borrower withdraws or transfers the funds, either the bank takes them from its reserves in “vault cash” or the Federal Reserve debits the bank’s digital reserve account at the central bank. But the lending bank typically has funds coming into its reserve account at about the same rate as they are going out, so its reserves are continually replenished. Thus a very small reserve account can support a much larger money creation engine. For decades before the Fed discontinued the reserve requirement in 2020, it hovered at around 10%.

The chief problem with this debt-based system is the interest, which the bank does not create in its original loan. For a typical long-term loan, interest can double the total tab or more. Where is the money to come from to pay this added liability? Across the system as a whole, it must either come from more borrowing or from existing funds. In the case of governments, that means issuing interest-bearing bonds or tapping taxes and other revenues. The interest on the debt compounds, meaning the government is paying interest on interest. This makes the debt increase exponentially, until it is mathematically unsustainable. Then bankruptcies occur, of banks or even whole governments. Booms turn into busts, and the cycle begins again.

Today, interest on the federal debt is the second largest budget line item after Social Security, exceeding $1 trillion. Meanwhile, workers are losing jobs to AI/robotics, shrinking the income tax base. The system is clearly unsustainable.

How to Raise Demand to Scale to the Upcoming Supply.

A Universal High Income would replenish the shrinking tax base by replacing the lost wages of unemployed workers. But where will the money come from to pay the UHI? The only sustainable solution is for the government to issue it interest-free. That does not mean through the Federal Reserve, which creates money in the same way banks do: it buys federal interest-bearing securities with accounting entries. The Fed collects the interest, which it is supposed to return to the Treasury after deducting its costs. But since 2008, its costs include paying interest on the reserves of its participating  banks, which consumes its profits. (See my earlier article here.)

The only interest-free, debt-free solution that will actually increase the money supply sufficiently to match the projected productivity of AI/robotics is for the money to be issued directly by the Treasury.

This is not a radical new idea. It is authorized in the U.S. Constitution, which provides in Article 1, Sec. 8, that “The Congress shall have Power To … coin Money [and] regulate the Value thereof .…” Abraham Lincoln used government-issued “Greenbacks” to avoid a crippling debt to British-backed bankers. Debt-free government-issued money was also the funding mechanism by which the American colonists succeeded in creating a thriving economy and liberating themselves from the oppressive yoke of the British Empire.

In his 1729 pamphlet “A Modest Enquiry into the Nature and Necessity of a Paper-Currency,” Benjamin Franklin argued that a lack of currency was a tax on industrious farmers and producers, and that a reliable, locally issued paper currency was the “oil” for the gears of trade. The “Nature and Necessity” of this currency was to facilitate the movement of goods between neighbors. Franklin observed that the British strategy of keeping the colonies short of cash was a method of economic suppression. By forcing the colonies to use gold and silver, which were constantly drained back to London to pay for imports, the Crown kept the colonies in a state of permanent debt and low productivity. When the money supply matched the productive capacity of the people, universal prosperity resulted without inflation.

This logic evolved into the “American System of Political Economy” championed by Henry Carey, economic advisor to Abraham Lincoln. He wrote:

“Two systems are before the world… One looks to pauperism, ignorance, depopulation, and barbarism; the other in increasing wealth, comfort, intelligence, combination of action, and civilization. … One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world.”

In the context of the 21st century, the “oil” that best lowers the friction of trade is debt-free government-issued money similar to Lincoln’s Greenbacks and colonial scrip. Rather than implementing a radical financial innovation, we would be returning to our roots.

Inflation or Deflation?

The chief objection to the colonies’ paper “scrip” was that they tended to over-print, so that “demand” (money) outstripped supply. Too much money chasing too few goods produced price inflation. But in the 21^st century, we will soon have the opposite problem: too little money chasing too many goods. Machines don’t need food, clothing, shelter, transportation, medical treatment or other services. So who will buy those goods and services?

Money needs to be issued to human consumers, and not just to a few wealthy human consumers serving as debt brokers thriving on interest. To create sufficient demand for the voluminous output of AI/robotics, it needs to go to the whole national population, evenly distributed. Not only can UHI work in that sort of abundant supply without producing price inflation; it is actually essential to prevent deflation.

In a conversation on X, Musk wrote:

“In a normal economy, issuing more money simply increases the dollar price of the existing output of goods & services, meaning people do NOT get more stuff. If AI/robotics massively increase goods & services output, then you actually MUST issue dollars to people or there will be massive disinflation. “

As paraphrased on Yahoo Finance (reposted from Benzinga), Musk wrote that handing out more dollars becomes a problem only when the economy’s supply of goods and services fails to surge alongside the money supply. His claim is that AI and robotics could lift production so sharply that the bigger risk would be falling prices, not rising ones.

But aren’t falling prices a good thing? In this case, no. Prices would be falling due to a lack of demand, meaning producers can’t find customers for their products. They wind up laying off workers and eventually going bankrupt. When spread across the whole economy, the result is a deflationary spiral: prices fall, businesses lose revenue, and the economy contracts, not because production is inadequate but because purchasing power is insufficient. The result is recession or depression. In the Great Depression of the 1930s, food was rotting in the fields while people were starving, because they were out of work and had no money to spend.

Job cuts from AI are already happening. According to the same Benzinga article:

“Evidence of near-term strain is showing up in corporate announcements: employers disclosed more than 27,000 job cuts linked to AI in the first quarter of 2026, according to Challenger, Gray & Christmas. The outplacement firm said that figure was up 40% from the same period a year earlier. “

Robert Reich reports that wages are around two-thirds of the typical corporation’s total cost, and that in the first four months of 2026, big U.S. corporations cut over 128,000 jobs.

How Soon Will All This Happen?

Another Benzinga article, reposted on Yahoo Finance on March 16, detailed Musk’s projected time frame:

Speaking remotely to the Abundance Summit last week, Musk told XPRIZE founder Peter Diamandis that the global economy is on the verge of an explosion so massive it defies historical precedent.

“I’d say the economy is 10 times its current size in 10 years,” Musk said, before quickly clarifying that the growth could be even more explosive. “Greater than,” he added, framing the projected shift in economic output as a “fairly comfortable prediction.” … “Obviously if there’s like World War III or something, that could put a kink in those plans or those expectations,” Musk warned. “But in the absence of World War III, if current trends continue, I would say the economy 10xes in 10 years.” … The catalyst for this vertical climb isn’t traditional manufacturing or trade, but the “hard takeoff” of artificial intelligence. Musk explained that civilization is currently moving through a period of recursive self-improvement, where AI models are increasingly being used to design and build their successors.”

Ray Kurzweil, author of The Singularity Is Near, sees AI reaching Artificial General Intelligence (human-level intelligence across virtually all domains) by 2029, and full transformative abundance by 2045.

Other experts question these time projections, but a radical transformation of traditional manufacturing and trade is likely to happen sometime in the reasonably near future. The question is, will the money system transition soon enough to rescue all the laid-off workers from homelessness and famine?

The Sovereign Wealth Fund Alternative.

There is another model for distributing the gains of automation, one that can be phased in gradually as the AI workforce expands. It comes from Sam Altman, CEO of OpenAI. In an ironic twist, Altman and Musk, who jointly founded OpenAI in 2015, are now locked in a high-profile legal battle over whether Altman diverted Musk’s $44 million investment to transform what was conceived as a nonprofit “for the benefit of humanity” into a highly lucrative for-profit enterprise.

That dispute aside, Altman’s alternative model for sharing AI-generated wealth is a national sovereign wealth fund seeded by the profits of AI and robotics. His proposed American Equity Fund would take public stakes in the companies and technologies driving automation, capture a portion of the resulting productivity gains, and distribute them as universal dividends. The Fund would not replace a Universal High Income but would complement it.

This approach has several advantages. It ties payments directly to real output, scales automatically with productivity, and can be introduced gradually, avoiding the shock of issuing large payments before the supply side has fully expanded. It would resemble the Alaska Permanent Fund, which distributes oil revenues to residents, except that here the resource would be the most powerful general-purpose technology since electricity.

Conclusion: A New Monetary Logic for a New Productive Era.

For centuries, money has been issued as a claim against the future productivity of human labor, repaid from the income that labor generates. The logic of this debt-based system collapses when machines become the primary producers of goods and services. Then the limiting factor becomes purchasing power — the ability of human beings to access the abundance their own technologies create. That requires a monetary architecture that expands with output rather than debt, and distributes income not through wages alone but through mechanisms tied to the productive capacity of the whole system.

Universal High Income and a sovereign wealth fund are two ways of doing that. One ensures a stable floor of demand; the other ensures that the public shares in the gains of automation. Both would be grounded in real production. But for the public to have access to those gains, the money supply needs to expand in proportion to the expanding pool of goods and services. This can be done by restoring the innovation our forefathers baked into the Constitution: debt-free money issued by the government itself.

How to fund a UHI without triggering inflation or driving the government into bankruptcy is the first objection critics raise, but there are others. They argue that people would stop working or stop learning, that society would collapse into idleness or chaos, that life would lose meaning without jobs, that the government would have the power to control how people spend their money.  Will a UHI ring in the promised utopia or lock us into a state-controlled digital prison? Part 2 of this article will address those concerns.

Be sure to check Ellen Brown’s earlier posts here on the AI Abundance Paradigm.

First published on Scheerpost.com

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