Jack Dorsey cut Block's workforce nearly in half, from 10,000 to just under 6,000, and said AI "fundamentally changes what it means to build and run a company." The stock surged on the realization that profits will likely grow considerably as these costs are removed. Dorsey told the remaining employees and the public: "I'd rather get there honestly and on our own terms than be forced into it reactively." He expects a majority of companies to reach the same conclusion. He is probably right.

Let's do the math. Four thousand employees at an average fully loaded cost of, say, $180,000 per year. That is $720 million in annual labor cost. Replace a meaningful chunk of that output with AI tools at $200 per month per seat — call it $2,400 per year. Even if you need 6,000 subscriptions for the remaining workforce, that is $14.4 million. You just replaced $720 million in human labor cost with $14.4 million in software subscriptions. That is a 98% reduction.

Now multiply that across every company in the S&P 500 that reaches the same conclusion Dorsey did. Salesforce already cut thousands citing AI. Amazon did the same. These tools are improving every week, and no CEO wants to explain to their board why they didn't cut headcount when their competitors did. For a short period of time, that means elevated profit margins for these businesses that act first, but quickly, competition should drive the price of these offerings down to reflect the reduced cost structure associated with an AI-native business model and workforce.

If the aggregate price level eventually drops a similar 90%+, the debt based economy will collapse. Consumer spending is 70% of GDP. Mortgages, auto loans, credit cards, student debt, etc., are all underwritten against income. When aggregate income drops because four million people who made $180,000 are now making unemployment, the loans do not service, the spending collapses, and the deflationary spiral triggers exactly the kind of crisis that central banks were designed to prevent. The only tool they have is the printer.

How much do they print? It is anyone's guess. Here is one overly simple framework: enough to make that $200/month AI subscription feel as expensive as the salary it replaced. If AI eliminates $10 trillion in global labor cost and the system requires that spending to continue, the money supply has to expand to fill the gap. The dollar has to lose value until the numbers work again. TLDR; They are going to print so much fucking money.