🟠 Is AI a springboard or a curse for the economy? The white-collar doom loop shock and the Ghost GDP ghost

An economy can increase productivity while becoming poorer. It’s not too far-fetched; the world witnessed this during the Industrial Revolution. Citrini Research has proposed a scenario for 2028 where accelerated technological growth driven by AI causes a breakdown in consumption.
📌 Scenario 2028: The labor market fractures as AI replaces too many jobs
- US Unemployment: 10.2%
- S&P 500: -38% from the October 2026 peak
- A shock centered on the “white collar” (knowledge workers)
- AI strongly replaces lawyers, programmers, accountants, middle management, and finance professionals.
The subsequent chain reaction: Companies optimize costs through automation -> cut office staff -> household incomes decline -> consumption shrinks -> profit margins erode -> companies must further push AI to protect profits.
All of this creates a self-reinforcing cycle. It’s not a traditional demand-driven recession. Instead, it’s a recession caused by productivity increasing too rapidly for society to absorb.
📌 Ghost GDP — growth not accompanied by income for the majority of people
- Output continues to grow and companies still generate revenue. AI still produces output. But the money doesn’t flow to workers; it goes to large corporations. This leads to a real decline in consumer demand.
10% of knowledge workers contribute up to 50% of spending (on travel, cars, high-tech, and luxury services), but within the next two years, this group will face a massive wave of layoffs. The US economy relies heavily on consumption (accounting for about 70% of GDP). When the largest spending class is affected, the multiplier effect reverses.
📌 AI Agents will also disrupt market structures by changing consumer behavior
- AI agents automate consumption behaviors, compare prices in real-time, and buy from the cheapest sources -> brand loyalty will no longer exist in the future.
- Payments made with stablecoins to avoid 2-3% card fees -> payment networks face competition.
📌 How will asset markets react?
- If unemployment reaches 10%, the Fed will be forced to loosen monetary policy.
- Long-term yields will decline, and risk assets will be the first to experience shocks.
Citrini’s scenario is that the S&P 500 will peak in October 2026 and bottom out in 2028 with a correction wave of -38%. This scenario is extreme but not unreasonable. However, there are some variables Citrini doesn’t mention, such as whether AI will truly replace jobs that quickly, or if it’s just an estimate, and whether governments will implement UBI, retraining programs, or fiscal stimulus to offset demand.
Historically, the Industrial Revolution ultimately created new jobs. Revolutions change the quality of human life, but growth does not necessarily mean widespread prosperity.