COMMENTARY: AI could help governments cut debt -- but unevenly

AI could raise productivity and, under certain assumptions, help developed-market governments reduce deficits and debt—but the gains would likely be unevenly distributed, according to a Reuters commentary from Sept. 24 in London. The analysis draws on surveys by Chicago Fed economist Ezra Karger and colleagues, where economists estimated a median AI boost to US GDP growth of about 0.5 percentage point per year through 2031, versus 0.1 among economists over the next five years. Higher productivity should lift tax revenues unless spending rises faster. Scenario modeling suggests the US debt-to-GDP ratio could fall below 111% by 2036 if AI benefits mainly accrue to businesses.