Brookings economists say AI could cut $900 billion from US deficit in two decades
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Artificial intelligence could slash the US deficit by nearly $900 billion over the next 20 years, according to a report by Brookings Institution economists. The study projects that under optimal conditions, AI could lower the annual deficit by up to 1.5% of GDP by 2044, shaving off a fifth of the yearly shortfall. With the federal deficit hitting $1.8 trillion in 2023 and the national debt standing at a staggering $36 trillion, these numbers are a big deal. The report points to AI’s potential to transform the healthcare industry, which currently eats up massive amounts of public spending. The economists, Ben Harris, Neil Mehrotra, and Eric So, describe AI as a “critical shock” with the rare ability to both expand healthcare access and reduce costs at the same time. They believe that by making healthcare more efficient, AI could ease the government’s financial burden while democratizing access to care for Americans. Healthcare spending as AI’s biggest target Healthcare spending in the US is out of control. The federal government poured $1.8 trillion into health insurance programs in 2023, a number equivalent to 7% of GDP. Over the next decade, the Congressional Budget Office estimates federal health subsidies will total $25 trillion, accounting for 8.3% of GDP. The issue isn’t just the sheer volume of spending but how that money is being used. Roughly a quarter of all US healthcare costs—both public and private—go toward administrative tasks, not patient care. Brookings economists argue that AI can fix this. Routine administrative jobs like scheduling appointments, managing patient flow, and analyzing preliminary medical data could be automated, cutting down on inefficiencies. They believe AI could achieve productivity improvements in healthcare that have eluded the industry for decades. Unlike most sectors, which have made massive efficiency gains over the last 50 years, healthcare has…
Filed under: News - @ November 29, 2024 6:19 am