Strategic Memorandum
Subject: Bridging a Zero-Job AGI Shock to Post-Scarcity Through a One-Time “Deflationary UBI” Program
Date: 28 April 2025
Prepared by: ChatGPT (OpenAI o3)
Source under review: “If I’m Wrong About AGI and UBI Has to Happen,” DJ Goosen, April 2025
1. Executive Overview
The author confronts a tail-risk scenario in which artificial general intelligence (AGI) proves so capable and rapid-moving that it erases all human employment before hardware, fusion power, and robotics can deliver true material post-scarcity. Conventional “perpetual-motion-machine” UBI concepts—financed by endless money creation—violate the second law of thermodynamics and basic incentive theory. To keep society viable while buying roughly a decade of runway, the paper proposes a deliberately deflationary one-shot UBI shock: flood every American with multi-million-dollar cash balances today, cap daily withdrawals, allow prices to fall predictably as money burns out of circulation, and simultaneously introduce a non-convertible “AGI credit” system to reward prosocial activity and recycle corporate profits. The program is designed to respect entropy constraints, preserve the informational role of prices, and maintain psychological dignity en route to post-scarcity.
2. Scenario & First-Principles Frame
Assumption set: By ~2030 an unmistakable AGI arrives, confirmed by its own demonstrations. Within months it terminates knowledge work and, with accelerating robotic capability, begins eliminating physical labor. Survival goods still require scarce energy, materials, and logistics—entropy’s tax remains. The objective is therefore an orderly transition from a cash-based economy to an era where hyperabundance renders most goods effectively free, without triggering social collapse.
Principles invoked: entropy (irreversible resource costs), scarcity gradients, price-as-information, Nash equilibrium incentives, and the primacy of human meaning and dignity. Any intervention must avoid “closed-loop money” illusions and must honour human psychological realities (status, trust, fairness perceptions).
3. Core Proposal: A One-Time, Deflationary UBI Shock
Scale: Expand M2 money supply roughly 100-fold ($2 quadrillion current-dollar terms) and deposit an equal share ($6 million) directly into every citizen’s bank account.
Withdrawal constraint: Tight daily/weekly caps (e.g., $5 000 day / $35 000 week) prevent immediate demand spikes and give prices time to glide downward.
Deflation engine: Each purchase sends dollars through firms that strip out costs and profits; taxes remove more; no new base money is issued. Over ~10 years the circulating stock shrinks steadily, pulling consumer prices down perhaps 6-7 % annually.
Analogy: A solid-fuel first stage—once ignited it cannot be throttled, but it delivers the thrust needed to clear the atmosphere of mass unemployment anxiety.
4. Dual-Track Currency Architecture
- Legacy dollars (shrinking) – sole tender for essential goods and services during the “warp-zone” decade.
-
AGI credits (growing) – non-redeemable in dollars, minted only via:
- conversion of ongoing business profits (not pre-existing cash) at parity, and
- prosocial or prestige actions logged through ubiquitous kiosks (e.g., disaster relief, arts, community labor).
Credits purchase emerging, high-tech, or luxury experiences (longevity interventions, off-world tourism, exclusive cultural venues) that dollars cannot buy. Because credits float against no fixed supply of dollars, inequality in credits can expand without impairing deflation in the dollar lane.
5. Managed Prices, Rationing & Psychological Design
Government publishes transparent, steadily decreasing reference prices for staples; optional ration ceilings deter panic buying. The visible drop in sticker prices reinforces trust that “my money lasts longer tomorrow,” counteracting hoarding impulses. Daily withdrawal caps mimic familiar ATM limits, preserving a sense of control.
Concurrently, citizens are assigned or volunteer for hyperlocal, high-touch tasks (infrastructure patching, elder care) that robots cannot yet handle. This satisfies identity and purpose needs while earning AGI credits and acclimating communities to collaborative human-robot workflows.
6. Incentivising Capital & Accepting Inequality
The scheme courts business owners—“Dukes of Delivery Drones”—by granting first access to prestige goods, early fusion power, or Mars real-estate titles. Relative inequality may widen (potential quadrillionaires in credit terms), but absolute living standards rise for everyone: cheap energy, near-immortal health, autonomous transport. The memo argues that history shows people tolerate large wealth gaps when basic needs and opportunities dramatically improve.
7. International Economic Firewall
Because the US dollar is the reserve currency, America can firewall the internal deflationary process while continuing normal-price trade with non-AGI nations:
- imports of raw materials and conventional goods continue, paid in external dollars;
- exports of food, aircraft, etc., proceed at stable prices;
- AGI economies operate behind a “reverse tariff,” limiting outbound dollar velocity.
As other countries acquire AGI capability they can accede to the same treaty: inject domestic mega-UBI, adopt AGI credits, and join the mesh. The firewall contains inflation abroad and preserves confidence in existing US debt servicing.
8. Fiscal & Financial System Considerations
Retail lending at 10× deposits collapses when consumers cease borrowing; banks pivot to corporate-only credit or become custodial utilities, potentially under partial AGI management. Insurance and higher education enter controlled run-off. Treasury debt is serviced externally as before; internally, taxes focus on corporate flows until credits displace dollars.
9. Risk Register & Mitigations
Risk | Mitigation |
---|---|
Hardware lag delays hyperabundance (robots, fusion) | 10-year cash runway + price descent cushion; AGI prioritises energy & automation R&D |
Perception of unfairness (large nominal windfalls, billionaire enrichment) | Universal millionaire floor, transparent price schedule, prestige credit pathways for all |
Warlord / private-army backlash by dispossessed elites | Profit-to-credit conversion plus exclusive perks maintains buy-in; seizure scenarios explicitly rejected |
Global pushback at unequal AGI access | Gradual treaty enlargement, controlled technology sharing, cooperative fusion build-out |
Breakdown of price signal in fully free-goods future | Retain credits as universal pricing language even post-scarcity |
10. Price as Survival-Grade Information Channel
The memorandum’s deepest claim is that price itself—not currency—compresses and broadcasts knowledge of value and scarcity more efficiently than language, code, or DNA. A sudden abolition of price in a hyperabundant world would dissolve humanity’s most powerful decentralized coordination protocol, crippling disaster response and sowing mistrust. Therefore, even after dollars vanish, AGI credits (or their descendants) must persist to keep civilization’s information lattice intact.
11. Disaster-Response & Security Logic
Maintaining a pricing layer averts the “unlimited air supply” illusion: in a moneyless society struck by asteroid, pandemic, or rogue AGI glitch, accusations of hoarding or neglect could escalate to kinetic conflict. Credits create a buffer—units that can be marshalled, redirected, or pledged—preserving accountability chains when everything else appears “free.”
12. End-State & Exit Criteria
The program sunsets when:
- Fusion-level energy is abundant, clean, and ubiquitous.
- Autonomous robotics handle >95 % of physical production and logistics (95/5 tail addressed).
- Survival goods exhibit marginal cost ≈ 0 and are delivered at near-zero latency worldwide.
- Global AGI credit system—or its evolved successor—has replaced dollars without loss of price signal.
At that point, legacy cash balances may be forgiven, quietly erased, or memorialized, with no practical effect on purchasing power.
13. Conclusion
Faced with an extreme but non-zero probability that AGI vaporizes every conventional job before techno-abundance matures, the author offers a physics-compliant escape hatch: overwhelm households with cash once, throttle its outflow, let market arithmetic convert inflationary shock to controlled deflation, and recycle corporate profits into a parallel, post-scarcity credit economy. Entropy limits are respected, incentives are preserved, and price—humanity’s compressed lingua franca—remains intact. The bargain is messy, risk-laden, and psychologically jarring, yet it may be “risky-but-possible” where all other full-UBI constructs are simply impossible. In the author’s view, that alone warrants serious analytic attention as governments quietly draft their AGI contingency playbooks.