United States: Can artificial intelligence (AI) help solve the U.S. economy’s big problem of a growing fiscal deficit? Three economists at the Brookings Institution say it can.
Their research suggests that AI could reduce the U.S. annual budget deficit by up to 1.5% of the country’s economy by 2044, which is about USD 900 billion. This could lower the budget deficit by one fifth over the next 20 years.
In a paper submitted to Harvard Business Review, Ben Harris, Neil Mehotra & Eric So of Primer, pointed out that AI ‘is one of the rarest – if not the only – opportunities to increase access to health care information and also the services and reduce the pressure on the regular health care system.”
As reported by the CNBC, the authors list many avenues, where the application of AI can actually create added value, pointing to health care and public health being areas where artificial intelligence may make an eight-fold positive impact.
But could AI not only make American health care less expensive – it could ‘democratize’ access to the system, giving people more options for preventative medical care – ‘changing the who and where of health care’ the economists said.
Thus, AI could reduce pressure on a deficit.
An effective delivery of a larger proportion of health-care services, as well as offering people more ways to take charge of their own well-being, help to reduce perceived barriers to demand-side cost containment and thus mitigate pressure on the fiscal deficit that widened to over USD1.8 trillion in the year through September 30. National debt balance is USD 36 trillion.
However, applying AI in health care services is not a guarantee. There are many barriers to enable the extensive APAI, the majority of which are associated with the regulation and bonuses.
Health care and the deficit
The Congressional Budget Office projected that the federal government disbursed about USD1.8T in 2023 or nearly 7% of GDP on health insurance. The CBO predicts that federal subsidies for health care will run as follows: from USD9.7 trillion during 2024-2025 to USD25 trillion during 2032-2033, or 8.3 percent of GDP.
This is the issue: the US health care spending is not so closely associated with treatment or results in the majority of the instances. Only a quarter of total incurred, both public and private, real spending is estimated to have been spent on administrative purposes.
“Nearly every industry in the U.S. has experienced substantial improvements in productivity over the last 50 years, with 1 major exception: scientists had described it as health care,” as reported.”