Which predicts that explosive growth of robot production will lead to problems such as
> a deflationary debt spiral, where the AI and robot companies can’t pay back loans in dollars because the robots and AIs are worth nominally less than the loans written the year before.
In other words, the companies go bankrupt because they produced an oversupply of cheap goods, the bubble pops, and there's less new investment for a while. Plenty of precedent for such a development.
But instead of adjusting their predicted output growth downwards accordingly, they instead propose that
> One way to solve this could be for the loans to be denominated in AI and robots, so the companies pay back the loans with some percentage of the AI and robots instead of dollars.
Try doing this today with a battery factory for example. You expect that battery prices will fall to the point where the revenue from selling batteries won't ever cover the cost of building the factory. So you propose to a bank that they'll be the ones to build the factory, and you'll borrow it from them (not paying rent?), make your batteries, then give back the factory when you're done. All the profit is yours, all the risk is theirs! Which is of course why a real bank won't agree to this, all you're going to get is a dollar loan with the factory as collateral.
Which predicts that explosive growth of robot production will lead to problems such as
> a deflationary debt spiral, where the AI and robot companies can’t pay back loans in dollars because the robots and AIs are worth nominally less than the loans written the year before.
In other words, the companies go bankrupt because they produced an oversupply of cheap goods, the bubble pops, and there's less new investment for a while. Plenty of precedent for such a development.
But instead of adjusting their predicted output growth downwards accordingly, they instead propose that
> One way to solve this could be for the loans to be denominated in AI and robots, so the companies pay back the loans with some percentage of the AI and robots instead of dollars.
Try doing this today with a battery factory for example. You expect that battery prices will fall to the point where the revenue from selling batteries won't ever cover the cost of building the factory. So you propose to a bank that they'll be the ones to build the factory, and you'll borrow it from them (not paying rent?), make your batteries, then give back the factory when you're done. All the profit is yours, all the risk is theirs! Which is of course why a real bank won't agree to this, all you're going to get is a dollar loan with the factory as collateral.