Stop Waiting for the Pause
How not to waste a crisis
It is tempting to believe that something isn’t happening or that it’s inevitable because it forgives inaction. Not happening? No problem! Inevitable? Nothing I do will make a difference.
The steamroller is coming and we have a chance to get out of the way. Whether Block is really rewiring with AI or is just AI washing is irrelevant: the direction of travel is clear. We’re lucky if it’s AI washing because then we’ve got more time to take action to avoid the worst.
Pausing is not action
Calling for a pause in datacenter development limits US competitiveness and a pause in model development is a collective action problem that’s not enforceable.
Even if we did pause, we need to know what we’re giving ourselves time to implement. At best a pause buys time to do something and we need to be clear about what that something is.
Instead of dreaming of a pause, we need to develop a positive agenda that will maintain US competitiveness while addressing the downsides for workers. I’ve organized policy proposals into three buckets: No Regret, Worth Exploring, and Nope.
No Regret
These are proposals that have been around for a long time and that we can pursue with more urgency in this moment.
Stronger, More Uniform Unemployment Insurance. This is supported by economists because programs exist across all 50 states and support would go directly to those affected by any displacement, direct or indirect (i.e. it doesn’t matter if someone works in tech or downstream services they’re still eligible). While the federal government provides funding for administration, the programs are designed and run by the states which results in wide variation of benefits. For example, the maximum Weekly Benefit Amount (WBA) ranges from above $1,000 in Washington State to $275 in Florida (link). States in partnership with the federal government have an opportunity to strengthen these programs proactively.
Portable Benefits. It’s a quirk of history that our health benefits are tied to our employer: During WWII, the government instituted wage controls but companies still needed a way to attract employees without increasing wages. They started offering health benefits which employees valued and - because they weren’t taxed as income - were a cheap way to provide more compensation (link).
Today, the US is the only high income country with this setup which has all sorts of unintended consequences including compounding a person’s financial risk by taking away their health insurance at the same time they lose their job.
Making benefits portable would reduce disruption of workers’ coverage, reduce administrative overhead, and enable companies to contribute to the benefits of full-time/part-time employees as well as contractors (link).
Worth exploring
Movable Mortgages. During economic dislocations jobs and the people that need them may not be in the same region. The biggest barrier to relocation is often housing related: workers can’t afford to move because it would require getting a new mortgage at a higher rate. It’s possible to solve this by making mortgages portable and assumable (link). Portable means you bring your mortgage with you and apply it to the purchase of the new home, requiring only a smaller supplemental mortgage if needed. Assumable means you can assume the mortgage of the seller who may have a better rate, adjusting as needed for any differences in credit that would impact the rate (diagram).
Skills Development. Singapore has been running the SkillsFuture program for 10 years which provides every Singaporean with a credit they can use toward approved courses. There is a larger mid-career refresh to the credit to ensure life-long investment in workers in the right areas. ~70% of participants said it helped them advance and do better work. Making this work in the US could be challenging - it’s a national pastime to game government programs (see e.g. 324 people charged with $14.6 Billion in Alleged Fraud in 2025) - but given the need for people to continually reskill it’s worth a look.
US Government AI Fund. The first oil field in Norway was discovered in 1969. Today, Norway exports ~$150B/yr in oil and gas - quite a lot when you consider there are less than 6M people living there. Initially, Norway spent its oil revenue but this led to inflation, credit bubbles, and currency depreciation (IMF). In 1990 it established the Norwegian Government Petroleum Fund that turned a volatile income stream into a perpetual source of national wealth by only spending the real returns of the fund. This allowed the principal to grow and today the fund is worth $2 trillion or $360k per person.
Data centers like oil wells require significant capital investment and generate revenue streams that are significant but also unpredictable. The argument against a similar program funded by taxing chips, data centers, or tokens is that AI and associated revenues are the product of private companies rather than a found national resource. However, as AI displacement takes place the industry creates a significant negative externality that the government has an obligation to address because the market won’t.
This would be the hardest proposal to get right - you don’t want to crush a critical industry as it’s developing. But an industry that is growing rapidly and displacing more jobs than it creates needs to contribute to minimizing the downside.
Nope
Variable taxation as a function of labor intensity. There are some proposals that would lead to higher taxes on companies that lean on AI more than humans. Aside from the obvious measurement and reporting problems, this creates perverse incentives. There is an apocryphal story about economist Milton Friedman traveling to China in the 70’s when he saw a large construction crew using shovels to dig a canal. He asked “Why aren’t you using excavators which would be much more efficient?” “You don’t understand. This is a jobs program.” To which Milton responded, “Oh, I thought you were trying to build a canal. If it’s jobs you want, you should give these workers spoons, not shovels!”
Universal Basic Income (UBI). At some point this may make sense but we are so far from figuring out how to fund UBI that it’s not worth talking about. $1k per month for every person would cost over $4 trillion dollars a year. We don’t have that money. And any restrictions you put on distributions make it less “universal” and then it just looks like public assistance which becomes a political lightning rod.
Act!
Call your representatives! Their staff are required to listen to you and categorize your complaints feedback. They are looking for stories and soundbites. Find the contact info for your senators and reps.
Speak up! The next time you hear someone say “we just need to stop everything” ask them “what are we stopping for?” Let’s strengthen the programs we’ve got and take advantage of the crisis to make changes we should have made decades ago.