How to Survive the AI Shock

A Policy Playbook to Avert Political Crisis

James A. Davidson and Matthew J. Slaughter. The dawning age of artificial intelligence holds great promise for the world economy and for the United States. Like so many other countries, the United States has endured decades of slow growth in labor productivity. Productivity, the amount of goods and services produced per worker, is the single most important measure of a country’s overall economic success. Slow productivity growth has meant poor growth in average incomes, which in turn has fueled much of the political turmoil manifested across the globe in the last generation. In the United States, slow growth in productivity has contributed to escalating political polarization and what many see as the gradual death of the American dream.

The United States needs to conjure up a productivity renaissance. And AI seems to be a perfect catalyst. In 2024, U.S. productivity in the nonfarm business sector grew by three percent, the fastest increase in a nonrecession, nonpandemic year in decades. A McKinsey study published in 2025 estimated that by 2030, AI-powered agents and robots could generate somewhere between $2.9 trillion and $6.4 trillion in new annual economic value for the United States—a productivity gain equal to nine to 20 percent of the country’s 2025 gross domestic product—and $28.7 trillion for the world overall.